With retirement marking the end of active income for many professionals, the focus naturally shifts to passive income streams that can sustain a comfortable lifestyle. In the UAE, where the cost of living and healthcare is substantial, retirees are exploring innovative ways to ensure financial security. Among these options, cryptocurrencies are becoming a popular choice for generating passive income, offering promising returns if invested wisely.
The UAE government has actively sought to attract retirees by introducing a special five-year visa, enabling them to live comfortably in the country. However, the high cost of living requires careful financial planning, with passive income sources playing a crucial role in maintaining a stable income flow without the need for active work.
Passive income traditionally stems from assets such as rental properties, interest on savings, investment schemes, or stock dividends. However, the rise of cryptocurrencies has introduced a new avenue for investors looking to diversify their income sources. Cryptocurrencies, which represent a $2.15 trillion market as of August 2024, can generate passive income through various mechanisms such as staking, lending, and mining.
Eric Rosenberg, a finance and technology expert, explains: “Cryptocurrency is a unique financial instrument that enables anyone with an internet connection to participate in a distributed economy — including opportunities to earn passive income. There are unique risks associated with investing and earning with cryptocurrency, even though it may seem like a bank account or social lending platform.”
The most common method of generating passive income in the cryptocurrency space is through staking, where investors lock up their coins to support the network’s operations and receive interest-like rewards in return. Lending cryptocurrency to platforms or other users is another way to earn interest, while mining remains a more resource-intensive but potentially lucrative option. Each of these methods offers varying returns based on factors like the cryptocurrency’s market performance, network demand, and the investor’s involvement.
Cryptocurrencies provide a low-barrier entry into the world of passive income, requiring little more than an internet connection and some initial capital. Unlike traditional investment channels, cryptocurrency enables anyone to participate in global financial markets, often with higher returns than more conventional options.
As of 2023, 17% of U.S. adults owned cryptocurrency, according to a Pew Research Center survey. High-income earners, particularly those making over $100,000 annually, are leading the way, representing 25% of crypto owners while comprising just 15% of the general public.
In the UAE, the government’s push towards becoming a knowledge and innovation-driven digital economy has opened up more opportunities for digital asset investment. This trend is expected to accelerate as the country embraces new technologies, offering greater potential for retirees to secure a steady passive income stream.
One such innovation is Finy Coin, a blockchain-enabled cryptocurrency recently launched by Infinity Group, a Dubai-based business conglomerate. Finy Coin aims to replace traditional currencies in the future as part of a broader digital payment ecosystem. “If you invest as low as $50 as a token investment in Finy Coin, its value would multiply in days as we only have a limited amount of coins that would be issued,” said a company spokesperson. Mohammad Ariful Islam, CEO of Finy Ecosystem, added that Finy Coin is part of a digital payment solution that will drive future growth.
The potential rewards from cryptocurrency-based passive income streams can vary widely. Staking and lending can generate regular interest payments, while mining can offer new coins as rewards. However, the returns are influenced by factors such as the volatility of cryptocurrency prices, market demand, and investor participation levels.
With the UAE government’s vision for a digital economy and the rising global adoption of cryptocurrencies, retirees have a new financial frontier to explore. By strategically investing in digital assets, they can create a sustainable and diversified passive income stream, ensuring a secure and fulfilling retirement.
