Abu Dhabi’s growing focus on artificial intelligence has taken an unexpected turn with a significant investment in the cryptocurrency sector. The UAE’s MGX investment vehicle announced a $2 billion acquisition of a minority stake in Binance, the world’s largest cryptocurrency exchange, marking a strategic shift from its prior focus on AI infrastructure.
The investment comes from MGX, an entity launched last year as an offshoot of Abu Dhabi’s $330 billion sovereign wealth fund, Mubadala. Chaired by Sheikh Tahnoon bin Zayed al-Nahyan, MGX has so far concentrated on AI investments, including stakes in SoftBank Group, OpenAI’s $500 billion AI data centre project in the U.S., and Elon Musk’s xAI. While MGX has previously explored a broad range of sectors, including semiconductors, data, life sciences, and robotics, this move into blockchain technology represents a new direction.
Binance’s history has been eventful. The exchange pleaded guilty in November 2023 to lapses in money laundering controls, resulting in a $4 billion fine. Its founder, Changpeng Zhao, also served a prison sentence in the U.S. Following these developments, Binance underwent restructuring, with its non-U.S. operations separating from its American counterpart. Its new CEO, who previously led the Abu Dhabi Financial Services Regulatory Authority, now oversees the platform.
Despite the controversy surrounding Binance, MGX has defended its investment, citing blockchain’s transformative potential in digital finance. The deal is notable for being conducted entirely in stablecoins—a type of digital currency pegged to sovereign currencies like the U.S. dollar. Neither MGX nor Binance disclosed which stablecoins were used in the transaction, adding an element of intrigue to the deal.
The UAE has long aspired to become a global crypto hub. In December 2024, the country introduced AE Coin, its first dirham-backed stablecoin, which received central bank approval. The Middle East and North Africa region accounted for 7.5% of the world’s total crypto transaction volume between July 2023 and June 2024, according to Chainalysis, underscoring the region’s growing significance in the sector. Notably, a fifth of Binance’s 5,000 employees are based in the UAE, further cementing the country’s role in the crypto landscape.
The investment also aligns with broader geopolitical trends. Abu Dhabi has maintained strong ties with Washington, which have influenced its financial strategies in the past. A recent U.S.-brokered deal involving MGX, Microsoft, and BlackRock aimed to raise up to $100 billion for AI infrastructure. Additionally, under the Trump administration, the U.S. has taken a more favorable stance on cryptocurrency, with the Securities and Exchange Commission putting a civil lawsuit against Binance on hold.
For Binance, this investment is a landmark moment. The company described it as its first major institutional backing, highlighting its growing legitimacy despite past regulatory challenges. While details of MGX’s governance rights and stake size remain undisclosed, the partnership signals a deepening relationship between Abu Dhabi’s financial ambitions and the global cryptocurrency industry.
As the UAE continues to position itself as a leader in both AI and blockchain technology, this strategic move suggests a future where the two sectors converge, reinforcing Abu Dhabi’s influence in the rapidly evolving digital economy.
