Abu Dhabi has established one of the clearest regulatory routes for cryptocurrency and blockchain businesses, while the emirate’s sovereign wealth is increasingly investing in the sector.
Its Financial Services Regulatory Authority (FSRA) has licensed virtual asset activity through Abu Dhabi Global Market (ADGM) since 2018. The financial free zone operates its own courts under English common law, giving digital-asset companies a formal legal framework earlier than many competing jurisdictions.
Under the system, firms must obtain a Financial Services Permission before operating. Only assets designated by the FSRA as “Accepted Virtual Assets” can be used in regulated products. Privacy tokens and algorithmic stablecoins are prohibited, while capital requirements vary according to a company’s business model and scale.
Start-ups can also use the Reglab sandbox to test products under regulatory supervision before launching them commercially.
Regulation draws major financial companies
Binance provides one of the clearest examples of the system’s reach. The exchange secured full ADGM approval for trading, clearing and brokerage through separate Nest-branded entities.
Galaxy Digital has opened an ADGM office, while financial services group BNY is working with local partners towards offering regulated custody for bitcoin and ethereum. Circle and other stablecoin companies have obtained their own permissions, and regulators have recognised Tether’s USDT as an accepted asset for use on licensed platforms.
A Fiat-Referenced Token framework, refined during 2025 and due to take fuller effect in 2026, is intended to give regulated stablecoin issuers a defined route to operate within ADGM.
The emirate’s free zones also support the regulatory offer with tax incentives. Qualifying income generated inside the zones is subject to a 0% corporate tax rate. Individuals generally pay no personal income or capital gains tax, while foreign founders can own companies outright. Golden Visas provide an additional incentive for executives and skilled workers to relocate to Abu Dhabi.
Sovereign capital gives the emirate another advantage. Mubadala Investment Company, which manages hundreds of billions of dollars, backs Hub71, a government-linked start-up accelerator with a dedicated digital assets programme.
Hub71 has attracted dozens of blockchain and fintech start-ups, bringing them into contact with investors and regulators. The Blockchain Center Abu Dhabi is also involved in adoption projects, including AE Coin, the UAE’s regulated dirham-linked stablecoin initiative.
Avalanche’s DLT Foundation, meanwhile, uses its ADGM base to develop partnerships across the wider Middle East and North Africa region.
Mining and institutional bitcoin exposure
Bitcoin mining has expanded on an industrial scale. Citadel Mining, linked to Abu Dhabi’s Royal Group through International Holding Company, began major operations around 2022, including facilities on Al Reem Island.
Data from Arkham Intelligence puts Citadel Mining’s holdings at about 6,996.55718089 BTC, valued at roughly $451.05m at the exchange rate used in that analysis. The company accumulated most of the holding by mining bitcoin rather than purchasing it and has retained the majority of the coins it produced.
Publicly traded bitcoin miner MARA Digital has partnered with Abu Dhabi-linked Zero Two on immersion-cooled mining capacity. Phoenix Group and NIP Group have also expanded their hashrate, alongside hybrid computing operations that can be redirected towards artificial intelligence workloads.
Mining on agricultural land has been banned to protect farming areas, with penalties for those who breach the rules. The restrictions have encouraged operators to use designated industrial and free-zone sites.
Abu Dhabi’s sovereign wealth funds have also gained exposure to bitcoin through BlackRock’s spot exchange-traded fund, IBIT, rather than by holding the cryptocurrency directly.
Mubadala Investment Company reported ownership of about 12.7 million IBIT shares at the end of 2025, worth close to $631m at that time. By the first quarter of 2026, it had increased its position by 16% to approximately 14.7 million shares. The holding was then valued at nearly $566m as the share price changed.
Al Warda Investments, linked to the Abu Dhabi Investment Council within the wider Mubadala structure, held about 8.2 million IBIT shares at the end of 2025, worth close to $408m.
Together, the two funds’ IBIT holdings exceeded $1bn based on year-end 2025 prices. Both positions were disclosed in public US Securities and Exchange Commission 13F filings, offering outside analysts an uncommon view of how sovereign investors are treating bitcoin as part of a portfolio rather than as a speculative side investment.
Tokenisation and future developments
Mubadala Capital, the alternative investment arm associated with the sovereign fund, has gone further into tokenisation. It partnered with KAIO to place its Alternative Solutions Fund onchain across the Base, Solana and Sui networks.
The tokenised product attracted about $75m onchain around its key announcement points, while Coinbase took a balance-sheet position in the fund. The move connected a sovereign-backed investment vehicle directly with crypto infrastructure already widely used by retail investors.
According to rwa.xyz statistics on 5 August, total value locked stood at $39.66m.
Elsewhere in Abu Dhabi, family offices and special purpose vehicles registered in ADGM have grown alongside venture investment in Web3 projects, stablecoin settlement trials and cross-border payment corridors. Initiatives such as the ADI Foundation’s ADI Chain connect the UAE with African markets.
Tokenised real-world asset platforms have also increased, allowing investors to buy fractional interests in property, credit and other assets that previously required significantly larger investments.
The emirate’s digital-asset industry is not controlled by one government office. Several free zones compete for companies, including Dubai’s VARA framework alongside ADGM. That competition is encouraging greater regulatory clarity as exchanges, custodians, miners and start-ups choose their locations and corporate structures according to cost and regulation.
Attention will now turn to how the Fiat-Referenced Token framework develops during 2026, as it will help determine the scale of regulated stablecoin issuance within ADGM. Mubadala’s next 13F filing will indicate whether its IBIT position continues to grow, while any change to the ban on mining on agricultural land could show how much scope remains for further expansion in the emirate.
