The United Arab Emirates (UAE) has emerged as a significant player in the Middle East and North Africa (MENA) crypto market, witnessing an impressive 42% year-on-year growth in cryptocurrency transactions between July 2023 and June 2024. Despite its relatively smaller population, the UAE now ranks as the third-largest crypto economy in the region, according to the latest Geography of Crypto Report by Chainalysis.
This sharp rise in the UAE’s crypto economy, totalling $34 billion in transactions, stands in stark contrast to the MENA average of 11.73% growth during the same period. The findings point to a robust and diversified crypto ecosystem in the UAE, driven by regulatory advancements and rising institutional and retail interest.
Balanced Growth Across All Segments
Eric Jardine, Cybercrime Research Lead at Chainalysis, highlighted the comprehensive nature of the UAE’s crypto growth. “The UAE continues to experience rapid growth in the crypto space, driven by a combination of regulatory innovation, institutional interest, and expanding market activity. Moreover, unlike most countries globally, the UAE’s crypto activity is growing across all transaction size brackets, signalling a more balanced and comprehensive adoption landscape,” he said.
In stark contrast to the broader MENA region, where institutional and professional activity dominates, the UAE’s growth is well-rounded across all transaction categories. Small retail transactions (under $1,000) and large retail transactions ($1,000–$10,000) surged by over 80%. Additionally, professional transactions ($10,000–$1 million) rose by 46.3%, while institutional transfers ($1 million–$10 million) increased by 55.07%.
This diverse engagement signals a broader demographic embracing cryptocurrencies in the UAE, indicating a high degree of market maturity. As Jardine noted, this growth highlights how the UAE is setting itself apart from the MENA trend, which is primarily driven by high-value institutional transactions.
DeFi’s Role in the UAE’s Crypto Landscape
The diversity of the UAE’s crypto ecosystem is further illustrated by the significant uptake in decentralised finance (DeFi) services. Beyond traditional centralised exchanges (CEXs), the total value received by DeFi platforms rose by 74% over the past year. Notably, Decentralised Exchanges (DEXs) saw an 87% increase in activity.
“In many ways, DeFi represents the cutting edge of blockchain technology,” Jardine commented. “This impressive growth in DeFi in the UAE further supports the reasoning that the country has an especially mature and advanced crypto ecosystem.”
DeFi’s rise in the UAE reflects the country’s forward-thinking approach to blockchain innovation, allowing users to explore new avenues in crypto transactions beyond conventional methods. This diversification solidifies the UAE’s position as a leader in blockchain adoption across the MENA region.
Preference for Stablecoins
The report also revealed that UAE investors exhibit a distinct preference for stablecoins, with 51.3% of the total volume of cryptocurrencies received in the form of these dollar-pegged assets. Bitcoin, often seen as the face of cryptocurrency, accounted for only 16.5% of the UAE’s received crypto volume. This preference for stablecoins is likely tied to the dirham’s peg to the US dollar, making stablecoins a popular on-ramp for broader crypto services and trading.
“As our latest research shows, stablecoins are already the preferred crypto asset,” said Arushi Goel, Policy Lead for Middle East & Africa at Chainalysis. “With the clarity provided by the CBUAE, we can expect further utilisation as consumers will likely soon benefit from the offerings of regulated players who innovate responsibly.”
Goel added that the UAE’s forward-looking regulatory framework makes it easier for major financial institutions, including banks, to integrate stablecoins into their systems, ultimately fostering a more seamless and accessible financial ecosystem.
As the UAE’s crypto market continues to mature, its combination of regulatory clarity, technological innovation, and broad-based adoption across various transaction sizes and platforms positions the country as a regional and global leader in the digital finance revolution.
