UAE Targets Blockchain as Second Largest Industry in Five Years

The United Arab Emirates is positioning itself as a leading global center for cryptocurrency and blockchain innovation, with growing consensus that the sector could become the country's second-largest industry within the next five years [1]. This vision is supported by clear regulatory frameworks, business-friendly policies, and a strong economic foundation. Chase Ergen, a prominent figure in the crypto industry, notes that the UAE's strategic reinvestment of surpluses into technology and innovation is a key factor in its growing competitiveness. “They sell oil, that’s their main business. I think their second-biggest business is going to be the blockchain industry in the next five years. This will start to be double-digit parts of the economy,” he states [1].

The UAE’s commitment to fostering a robust digital asset ecosystem is evident in its recent policy moves and infrastructure developments. The Dubai Multi Commodities Centre (DMCC) has played a pivotal role in expanding trade and investment, particularly with the United States. Recent strategic agreements between the two nations exceed $200 billion, including $34.4 billion in goods and $13.4 billion in services for 2024 [2]. These economic ties are reinforcing confidence in the broader market, including the crypto sector.

Entrepreneurial support is also on the rise, as demonstrated by Dubai-based firm Vertix Auditing, which has launched a business setup cost calculator. The tool uses over 4,000 data points to assist entrepreneurs in forecasting costs and streamlining operations, underscoring the UAE’s strategic effort to attract and retain crypto businesses [3]. This initiative reflects the government’s broader focus on reducing barriers to entry and promoting scalability for startups and investors alike.

Institutional investors are increasingly viewing crypto as a legitimate asset class, driven by regulatory clarity and evolving financial infrastructure. The funding rate, a mechanism used by exchanges to manage leveraged positions, is now a closely monitored metric by institutional participants, signaling a more mature and institutional-grade market [4]. This shift is not only attracting domestic capital but also drawing interest from international investors looking for a stable and forward-thinking regulatory environment.

While the sector’s growth trajectory is strong, volatility remains a challenge. Options data from recent months indicates a bearish outlook for Bitcoin and Ethereum, with significant positions placed on potential price declines [4]. However, this is consistent with the nature of early-stage markets, and the UAE’s proactive approach to regulation and infrastructure is seen as a counterbalance to such uncertainties.

Analysts believe that the UAE’s favorable regulatory environment, combined with its strategic location and strong financial infrastructure, will enable it to attract a significant share of global crypto investment in the coming years [1]. As the sector continues to evolve, ongoing developments in policy and investor behavior will be crucial indicators of its long-term success.