The UAE, the “new Switzerland” for crypto giants
Author: Nancy, PANews The UAE, nestled in the desert, is quietly emerging as a crypto oasis. From ubiquitous crypto payments on the streets to the involvement of sovereign wealth funds and a clear and transparent regulatory framework, the UAE has rapidly risen to become a crypto hub connecting East and West. In particular, Abu Dhabi is becoming a new crypto hub targeted by the world, with crypto giants such as Binance, Tether, Circle, and Ripple recently gathering there. With key licenses secured, Binance will establish its governance center in Abu Dhabi. Abu Dhabi is rapidly emerging as a compliance hub for the global crypto industry. On December 8th, shortly after the conclusion of Dubai Blockchain Week, Binance announced a major development: it has obtained full regulatory authorization from the Abu Dhabi Global Market (ADGM) Financial Services Regulatory Authority (FSRA), becoming the first crypto centralized exchange to obtain a global license under this framework. According to the new regulations, starting January 5, 2026, Binance will be split into three separately licensed entities, covering its three key businesses: exchange, clearinghouse, and brokerage. To cope with regulatory pressure, Binance adopted a headquartersless strategy for a long time, traveling to various countries to seek policy flexibility. As the industry moves towards full compliance, Binance has begun actively seeking a physical base. Abu Dhabi is the most favored candidate, not only because co-CEO Richard Teng comes from the ADGM regulatory system and is familiar with the local environment, but also because of the close capital ties. In March of this year, Binance announced that it had received a $2 billion investment from Abu Dhabi-based investment firm MGX, marking its first investment from an external institution since its inception. Given MGX's close ties with the Abu Dhabi royal family and government, and the widespread belief that Binance's valuation was low at this round, this investment is seen as Binance's "pledge of allegiance" to Abu Dhabi. In an interview with Fortune, Richard Teng did not explicitly state whether Abu Dhabi would become Binance's global headquarters, but he emphasized that regulators are more concerned with where Binance is regulated and stated that ADGM will become the governance center of Binance's global platform. Binance's move sends a strong signal to the world that Abu Dhabi may become a new benchmark for global crypto compliance. Crypto institutions flock to This trend extends far beyond Binance. A growing number of crypto giants are flocking to Abu Dhabi to expand their ecosystems. Also on December 8th, Tether announced that its stablecoin USDT had received "Fiat Reference Token" certification from the ADGM, meaning that USDT-related trading, custody, and other businesses can be conducted compliantly within the regulatory framework. Furthermore, USDT's supporting network has expanded to a wider on-chain ecosystem, including Aptos, Celo, Cosmos, Near, TON, and TRON. Another stablecoin giant, Circle, has also announced that it has successfully passed the approval process and is officially authorized to operate as a money service provider within ADGM. Dr. Saeeda Jaffar, Managing Director of East and Africa, will accelerate the adoption of trusted digital dollars and on-chain payment solutions in the UAE and Middle East and Africa markets. Ripple has also accelerated its expansion in the UAE this year. In May, Ripple announced it had obtained the first blockchain payment license from the Dubai Financial Services Authority (DFSA), partnered with Zand Bank and Mamo in the UAE, and its acquired Ripple Prime announced the opening of a new office in Abu Dhabi. Recently, Ripple's stablecoin RLUSD received local regulatory approval for use in compliant payments and fund management. In addition, crypto organizations/projects such as Bybit, Kraken, Animoca Brands, eToro, TON Foundation, Paxos, and Aptos are also continuously expanding into Abu Dhabi and have successively obtained approval to conduct various crypto businesses there. From policy to the streets, the UAE is embracing the crypto economy. The UAE's embrace of the crypto economy is not a spur-of-the-moment decision, but rather a key move in its strategy for the post-oil era. Faced with the long-term trend of declining global demand for fossil fuels, the UAE is proactively reducing its reliance on a single resource and shifting its growth focus from traditional energy infrastructure to high-tech and the digital economy. This strategy has yielded significant results, with non-oil industries now accounting for over 70% of the UAE's GDP. Today, the UAE has quietly become one of the countries with the highest crypto penetration rate in the world, and it is moving from simple investment and speculation to penetrating into real-world scenarios such as payments and consumption, with crypto payments becoming ubiquitous in daily life. A recent study by ApeX Protocol shows that 25.3% of the local population holds cryptocurrency, with overall adoption increasing by over 210% in recent years. Chainalysis' latest "Global Crypto Geography Report 2025" indicates that between 2024 and 2025, the UAE will see over $56 billion in crypto inflows, maintaining its position as the second-largest crypto market in the MENA (Middle East and North Africa) region. This growth is primarily driven by institutional trading, which increased by 54.7% year-on-year. Meanwhile, small and large retail transactions in the country also grew by 88.1% and 83.6%, respectively. Among the seven emirates, Dubai and Abu Dhabi are the UAE's two major crypto hubs. Dubai has gained global recognition for its keen business acumen, even overshadowing the UAE itself. It was also the first to attract global institutions, with 70% of the Fortune Global 500 companies having established regional headquarters there. As early as 2022, Dubai established VARA (Dubai Virtual Asset Regulatory Authority), the world's first independent regulatory body specifically for virtual assets, quickly attracting global crypto companies. Although the FTX collapse cast doubt on its initial licensing system, the VARA 2.0 upgrade strengthened the regulatory framework. Abu Dhabi, known for its stability, has become the preferred choice for institutions seeking long-term security due to its stronger government backing and financial strength. At the same time, contributing more than two-thirds of the national GDP and possessing 94% of the oil reserves, Abu Dhabi itself is the economic backbone of the UAE and needs to break free from its oil-dependent comfort zone, possessing the necessary financial power for transformation. In 2018, the Abu Dhabi Financial Free Zone (ADGM) launched one of the world's earliest comprehensive crypto regulatory systems. ADGM has an independent court system that directly follows the common law system, placing its legal enforceability and regulatory transparency among the best globally. It has been described as "more detailed than the EU's MiCA and more coherent than the US's." Abu Dhabi's competitive advantage also stems from the government's direct involvement, using national credit and capital as an accelerator to drive industry development. For example, the UAE National Bank, wholly owned by the Dubai government, provides cryptocurrency services through its subsidiary banks; three major institutions, including Abu Dhabi's sovereign wealth fund ADQ, plan to launch a stablecoin called the Dirham; the Royal Group, closely linked to the Abu Dhabi ruling family, has propelled the UAE to become one of the world's leading sovereign Bitcoin holders through a state-backed Bitcoin mining program; and Abu Dhabi's sovereign wealth fund, Mubadala Investment Company, has already allocated Bitcoin. An excellent location connecting the east and west If Dubai or Abu Dhabi is taken as the center, two-thirds of the world's population can be reached within 8 hours. Meanwhile, its strategic location at the gateway to the Persian Gulf and proximity to the Strait of Hormuz make the UAE a crucial link between the Asia-Pacific and European economic spheres. The GMT+4 time zone allows local financial institutions seamlessly connect to both Asian and European markets. For Western companies, it serves as a bridgehead into the Middle East; for Eastern companies, it is the preferred offshore headquarters location with legal transparency and manageable risks. The UAE’s unique geographical advantages make it a golden hub connecting East and West, enhancing its appeal to the crypto industry. More importantly, the rapid maturation of the UAE's crypto industry is attributed to its two-tiered framework, with the federal government and individual emirates operating in parallel. This framework ensures both unified regulation and allows for differentiated experimentation by cities. This governance approach is clearly evident in some of this year's crypto policies, which both define boundaries and provide space for experimentation. For example, the Dubai Financial Services Authority launched a tokenization regulatory sandbox, opening a channel for RWA testing for the first time; and the UAE's latest Federal Decree No. 6 incorporates DeFi, stablecoins, DEXs, and cross-chain bridges into the central bank's regulatory framework. For the crypto industry, this means a clearer compliance path while still allowing room for innovation to grow. It can be said that the rise of crypto in the UAE began as a geopolitical hub, was achieved through compliance systems, and flourished through innovative strategies. With its strong sovereign wealth fund, lenient tax system, abundant long-term fiscal reserves, and favorable business and tax environment, the UAE has won the favor of global capital. According to data from Henley & Partners, in 2025 alone, approximately 9,800 millionaires moved to the UAE, making it the world's largest net inflow of capital. Familiar figures in the crypto world, such as CZ and Pavel Durov, are based there. Previously, Telegram founder Durov recommended Dubai on X as the most livable city in his opinion, describing it as "zero tax rate, pure ambition," a dream country for libertarians. The recent Bitcoin MENA 2025 conference has made Abu Dhabi a focal point for the global crypto community. In the lead-up to the conference, giant billboards in Abu Dhabi prominently displayed a quote from Bitcoin staunch advocate Michael Saylor: "Bitcoin is digital energy, superior to all other assets," perhaps reflecting the city's message to the world. Currently, the UAE's crypto narrative is expanding from the desert to the globe. Whether, as Michael Saylor envisions, the Middle East, by embracing Bitcoin, could become the "Switzerland of the 21st century," the UAE may provide its own answer through action.
2025/12/10