Coinspeaker
UAE Ranks Third in New Global Crypto Adoption Report
The United Arab Emirates (UAE) has emerged as the country with the third-highest rate of crypto adoption following an increase in digital currency usage. According to a study conducted by investment migration consultancy firm Henley and Partners, the UAE is only outranked by Singapore and Hong Kong.
The Henley Crypto Adoption Index 2024 notes several responsible factors, including government support and pervasive enthusiasm.
“Public interest is high, with a substantial portion of the population owning cryptocurrencies. This enthusiasm is matched by strong government support and a thriving start-up scene. This low-tax jurisdiction offers an attractive environment for crypto businesses, further bolstered by a highly digitalised and wealthy population,” the study reads.
Factors Contributing to the UAE’s Rising Crypto Adoption
Henley and Partners group head of private clients, Dominic Volek, has shed more light on the UAE’s crypto clime. Volek said the country is using progressive regulations and zero capital gains tax to attract crypto wealth from all over the world. Volek also mentioned Dubai’s long crypto-friendly history, including its approval of the Middle East’s first crypto fund in 2021 and the city’s recent decision to allow residents directly use their bank accounts to trade crypto.
Another exec, Peter Ferrigno, the company’s director of tax services, says the UAE and the Cayman Islands might be the world’s most crypto-friendly countries because they do not tax capital gains or income.
According to crypto payments service provider Triple-A, the UAE was the number one country by crypto ownership in 2023, with 30.4% of the population (about 3 million) owning various digital assets. Triple-A’s ranking put the UAE ahead of Vietnam and the US, with 21.2% and 15.6%, respectively.
Recently, the UAE granted a business license to Okto wallet, making it the first Web3 wallet to receive an operating license from RAK Digital Assets Oasis (RAK DAO), a free-trade zone in the country. The self-custodial wallet was launched in 2023 by Indian crypto exchange CoinDCX, and now has more than a million users. The push to the UAE will expand the wallet’s user base and contribute to crypto usage and adoption in the country.
Tether’s Dirham Stablecoin in the UAE
Last week, crypto issuer Tether announced its intention to launch a new stablecoin pegged to the UAE’s dirham (AED). Tether is the world’s largest stablecoin issuer, with its USDT as the third-largest crypto, according to data from CoinMarketCap.
Tether CEO Paolo Ardoino says the primary purpose is to provide residents an alternative to the US dollar. Ardoino also added his belief that the dirham could become one of the world’s most preferred currencies as global trade continues to evolve. The dirham has been pegged to the dollar since 1997, at $1 to 3.6725 AED.
An official Tether announcement states that the company will launch the stablecoin in partnership with UAE tech giant Phoenix Group. The new crypto will join the global stablecoin market, currently worth $150 billion and projected to hit $2.8 trillion by 2028.
