UAE crypto market grows 42% YoY
Boosted by institutional investment and government push
The United Arab Emirates (UAE) has solidified its position as the Middle East and North Africa (MENA) region’s third-largest cryptocurrency economy, receiving a staggering $34 billion in cryptocurrencies from July 2023 to June 2024.
This remarkable figure represents a 42% year-on-year growth, significantly outpacing the MENA region’s average of 11.73%. This data comes from the 2024 edition of Chainalysis’ Geography of Crypto Report, underscoring the UAE’s growing market amid increasing institutional investment and proactive government regulation.
Eric Jardine, Cybercrime Research Lead at Chainalysis, attributes this growth to a unique blend of regulatory innovation and expanding market activity. “The UAE continues to experience rapid growth in the crypto space, driven by a combination of factors,” he stated.
The country has demonstrated balanced growth across all transaction size brackets, unlike many countries where activity is concentrated in higher-value transactions.
In the UAE, small retail transactions (under $1,000) and more significant retail transactions (between $1,000 and $10,000) soared by over 80%. Professional transactions (from $10,000 to $1 million) increased by 46.3%, while institutional transactions ($1 million and $10 million) rose by 55.07%. This diverse transaction landscape signals a higher level of market maturity and widespread cryptocurrency adoption among different demographics.
DeFi growth
The growth of the UAE’s crypto ecosystem is further illustrated by the significant rise in Decentralised Finance (DeFi) activities. Chainalysis reports that the total value received by DeFi services, which includes Decentralized Exchanges (DEXs), surged by 74% year-on-year, with DEXs alone experiencing an 87% increase.
Jardine noted: “In many ways, DeFi represents the cutting edge of blockchain technology. This impressive growth further supports the fact that the UAE has an especially mature and advanced crypto ecosystem.”
Interestingly, while Bitcoin often dominates the global crypto narrative, UAE investors prefer stablecoins, which comprise over half (51.3%) of the total volume of cryptocurrencies received. Bitcoin, by comparison, accounts for just 16.5%. This preference may stem from the UAE Dirham’s peg to the US Dollar, making stablecoins an appealing entry point for broader crypto engagement.
Arushi Goel, Policy Lead for the Middle East & Africa at Chainalysis, highlighted the significance of stablecoins within the UAE’s financial landscape. “With the clarity provided by the Central Bank of the UAE, we can expect further utilisation as consumers benefit from the offerings of regulated players. Larger financial institutions will find it easier to integrate stablecoins into their systems, creating a more seamless financial ecosystem,” she explained.
While stablecoins are gaining traction, Bitcoin has outperformed other cryptocurrencies in year-on-year transaction volume growth, posting an increase exceeding 100%. In comparison, altcoins grew by over 75%, and stablecoins saw a 22.46% rise. Ethereum (ETH), which constitutes 7.8% of the volume of cryptocurrencies received in the UAE, recorded a growth of 20.31%.
Looking ahead, experts assert that the regulatory advancements made in 2024 will be pivotal in shaping the future of the crypto landscape in the UAE. As blockchain technology and cryptocurrencies become more integrated into the global financial framework, the UAE is poised to establish itself as a leading global crypto hub. Goel emphasised: “It will be interesting to see how industry players build on this foundation and advance the nation’s crypto economy.”
Featured image: The UAE is poised to establish itself as a leading global crypto hub. Credit: Alesia Kozik
Last Updated on 2 months by News Desk 2
