The United Arab Emirates (UAE) has achieved a remarkable milestone in the realm of digital finance, securing the third spot globally in cryptocurrency adoption, surpassing major economies such as the United States, United Kingdom, and Canada. This impressive ranking was highlighted in a recent study conducted by Henley and Partners, which underscored the UAE’s burgeoning status as a global leader in the crypto space.
The study reveals that a significant portion of UAE residents now own digital currencies, with the country ranking just behind Singapore and Hong Kong, the top two leaders in crypto adoption worldwide. The UAE’s rise to prominence in the crypto landscape is attributed to a combination of high public interest, strong government support, and a thriving start-up ecosystem.
“The UAE stands out as a leading jurisdiction for crypto investors, ranking third in the Henley Crypto Adoption Index 2024. 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 report stated.
Cryptocurrency is increasingly being integrated into various sectors across the UAE, including retail and real estate. Earlier this month, a landmark ruling by a Dubai court approved the payment of salaries in cryptocurrency, provided that both employer and employee mutually agree to the arrangement. This decision marks a significant step forward in the mainstream acceptance of digital currencies in the region.
In a move that further cements the UAE’s position as a crypto hub, Abu Dhabi Securities Exchange-listed Phoenix Group and digital asset firm Tether recently announced plans to launch a stablecoin pegged to the UAE dirham. Set to debut early next year, this stablecoin aims to leverage the UAE’s currency stability and meet the growing demand for digital assets both domestically and internationally.
Dominic Volek, group head of private clients at Henley and Partners, emphasized the UAE’s appeal to crypto investors: “The Middle East, particularly the UAE, continues to attract crypto wealth with its zero capital gains tax and progressive regulations. Dubai’s long history of crypto-friendliness, including the approval of the first cryptocurrency fund in the Middle East in 2021, further solidifies its position as a leading destination for crypto investors. More recently, Dubai’s allowance for residents to trade cryptocurrencies directly with their bank accounts is indicative of a significant step towards mainstream adoption.”
Public adoption of cryptocurrency in the UAE reflects a high level of awareness, interest, and engagement among the general population. Metrics such as the percentage of crypto users relative to the total population and the number of crypto owners in absolute terms showcase the country’s crypto-friendly environment.
Peter Ferrigno, director of tax services at Henley and Partners, pointed out that the UAE and the Cayman Islands are among the most favorable countries for cryptocurrency enthusiasts. “The UAE and the Cayman Islands are probably the ‘friendliest countries for crypto’ because they tax neither capital gains nor income, and they’re the friendliest for every other asset class as well,” he said.
The global landscape of cryptocurrency wealth is also evolving rapidly. According to the Crypto Wealth Report 2024 by Henley and Partners, there are now 172,300 individuals worldwide holding over $1 million in crypto assets — a staggering 95 percent increase compared to last year. Notably, the number of Bitcoin millionaires has soared by 111 percent to 85,400.
Andrew Amoils, head of research at New World Wealth, highlighted the dominance of Bitcoin in creating new crypto billionaires: “Of the six new crypto billionaires created over the past year, five came from Bitcoin, underscoring its dominant position when it comes to attracting long-term investors who buy large holdings,” he noted.
The UAE’s rapid ascent in the global crypto rankings signals its growing influence and attractiveness in the world of digital assets, positioning the country as a key player in the future of finance.
