The UAE is rapidly establishing itself as a global hub for digital assets and blockchain technology, according to economist Dr. Abdul Rahim Al-Farhan. According to Khaleej Times, he highlighted that the country’s flexible regulatory policies, advanced digital infrastructure, and significant investments from global companies position it as a prime destination for cryptocurrency investors.

Dr. Al-Farhan noted that the UAE has seen numerous global companies enter the digital currency market, leading to key developments such as the tokenization of real estate assets. Earlier this year, Damac Properties Group formed a partnership with the Mantra blockchain platform, aiming to convert real estate assets valued at approximately one billion dollars into digital tokens. This initiative enables investors to purchase fractional ownership in properties, thereby increasing liquidity in the real estate market.

Additionally, Standard Chartered Bank began offering digital asset custody services last September, indicating growing confidence from major financial institutions in the UAE’s digital currency landscape. Brevan Howard Digital became the first client to utilize this digital service. Furthermore, last year, Tether introduced a new stablecoin that is pegged to the UAE dirham, which helps reduce reliance on the US dollar for digital transactions and simplifies financial transfers within the UAE.

In line with the comprehensive digital transformation, notable trading platforms like Binance and Crypto.com have received licenses to operate in the Dubai Future Zone, attracting leading emerging companies in this sector. However, Dr. Al-Farhan cautioned that there are challenges within the digital currency sector, including high price volatility and risks of fraud and money laundering. He emphasized that these concerns are being addressed with stringent regulations and laws to ensure investor safety in the future.

Dr. Al-Farhan asserted that the UAE offers an organized, secure, and promising environment for digital investments, supported by ongoing government initiatives to attract major companies. He pointed out that Dubai introduced a specialized law to regulate digital assets in 2022 and established the Virtual Assets Regulatory Authority (VARA) to oversee all digital currency activities in the UAE. VARA is responsible for licensing companies in this field, setting regulations to protect investors, and combating money laundering and terrorist financing.

Moreover, the UAE Central Bank oversees digital payment aspects regulated by the Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market (ADGM), which is a vital hub for Web3 companies and blockchain technologies that draw investment from major financial institutions interested in digital assets.