Galaxy's Strategic Expansion into the UAE and Its Implications for Digital Asset Infrastructure and AI Growth

The United Arab Emirates (UAE) has emerged as a pivotal hub for digital asset innovation, driven by a regulatory framework that balances oversight with agility. Galaxy Digital's recent expansion into the UAE-marked by the opening of an office in Abu Dhabi Global Market (ADGM)-underscores the region's growing appeal for institutional players seeking to capitalize on a rapidly evolving ecosystem. This move, coupled with the UAE's progressive regulatory environment and strategic economic vision, signals a paradigm shift in how institutional capital is deployed in digital assets and AI-driven infrastructure.

A Regulatory Framework Designed for Growth

The UAE's regulatory landscape for digital assets has matured significantly in 2025, positioning it as a global leader in fostering innovation while maintaining investor protection. According to a report by FiscalNote, the UAE has attracted over $25 billion in cumulative investments and approved more than 70 licensed virtual-asset service providers (VASPs) by the end of 2025. This growth is underpinned by a multi-layered regulatory structure, with the Securities and Commodities Authority (SCA) overseeing federal oversight, while the Dubai Virtual Assets Regulatory Authority (VARA) licenses and regulates VASPs in Dubai. A critical development in 2025 was the cooperation agreement between VARA and the SCA, streamlining licensing processes and enhancing cross-jurisdictional supervision.

Abu Dhabi's ADGM has further solidified the UAE's reputation by implementing a comprehensive regulatory framework aligned with global standards. ADGM's independent regulatory body governs virtual asset exchanges, custodians, and brokers, offering a tax-free environment with no personal income or capital gains tax-a stark contrast to many Western markets. This has positioned ADGM as a magnet for blockchain and digital asset firms, with local officials praising its "progressive regulatory environment" and "collaborative innovation ecosystem."

Galaxy's Strategic Moves and Institutional Validation

Galaxy Digital's entry into the UAE is not merely a geographic expansion but a calculated bet on the region's institutional-grade infrastructure. The firm, led by Managing Director Bouchra Darwazah, has prioritized partnerships with local fintech innovators. A notable example is Galaxy's $12.2 million Series A investment in Fuze, a UAE-based digital assets infrastructure firm. This investment aligns with the UAE's broader ambition to become a global hub for AI and digital assets, as outlined in its "We the UAE 2031" vision.

The firm's ADGM office also reflects confidence in the UAE's ability to scale institutional-grade services. Arvind Ramamurthy, Chief Development Market Officer at ADGM, highlighted that Galaxy's presence validates the region's capacity to support "cutting-edge innovation in digital assets and AI-driven computing." By leveraging ADGM's infrastructure, Galaxy is poised to facilitate cross-border capital flows and foster collaboration between global and regional players-a critical factor in attracting institutional capital.

Implications for Digital Assets and AI Growth

The UAE's regulatory-friendly environment is accelerating institutional adoption of digital assets. Data from FiscalNote indicates that the UAE's cryptocurrency market is projected to generate $395.9 million in revenue by 2025, with user penetration rates approaching 33.48% by 2026. This growth is further amplified by the UAE's recent accession to the OECD's crypto-asset reporting framework (CARF), which enhances international investor confidence by harmonizing cross-border compliance standards.

For AI-driven computing, the UAE's focus on digital infrastructure-bolstered by Galaxy's investments-creates a fertile ground for innovation. The country's Digital Economy Strategy, launched in 2022, aims to significantly increase the digital economy's contribution to GDP by 2031. Galaxy's expansion into ADGM aligns with this vision, as the firm's expertise in blockchain and AI infrastructure can catalyze the development of decentralized applications (dApps) and smart contracts, which are central to the UAE's economic diversification goals.

Conclusion: A Model for Institutional Capital Deployment

Galaxy's strategic expansion into the UAE exemplifies how regulatory-friendly markets can drive institutional adoption and capital deployment in digital assets and AI. The UAE's combination of progressive regulation, tax advantages, and a collaborative innovation ecosystem has created a unique value proposition for firms like Galaxy. As institutional capital continues to flow into the region, the UAE's role as a global hub for digital assets and AI is likely to expand, offering investors a compelling opportunity to participate in a market that balances innovation with oversight.