As Bitcoin experiences a remarkable surge, surpassing $75,000 following the U.S. presidential election results, a quieter yet equally important transformation is taking place in the UAE’s cryptocurrency landscape. Stablecoins are becoming the leading cryptocurrency asset for investors in the UAE, now representing over 51% of the region’s crypto activity, outpacing both Bitcoin and Ethereum. This shift is driven by growing engagement from both retail and institutional investors, supported by a robust regulatory framework established by the UAE Central Bank.
Recent data indicates that retail investors in the UAE are significantly contributing to this stablecoin boom. In the first half of 2024, stablecoin transactions of $10,000 or less accounted for 93% of all transaction volumes in the region. This suggests that smaller investors are increasingly using stablecoins as a versatile asset for quick trades and as a reliable means to enter and exit the crypto market.
The distribution of stablecoin transactions in the UAE highlights the diversity of investor involvement. Retail-sized transactions made up 6% of the total value, while larger categories included professional-sized transfers (40%), institutional-sized transfers (34%), and large institutional transactions (20%). The total value of stablecoins received in the UAE during this timeframe exceeded $9.8 billion, reflecting a 55% increase from the previous year.
Stablecoins Outperform in UAE Crypto Market
Stablecoins now hold the largest share of crypto assets in the UAE, with Bitcoin at 19% and Ethereum at 9%. This trend is anticipated to persist as the regulatory landscape in the UAE evolves. The Central Bank of the UAE has recently rolled out its Payment Token Services Regulation.
It provides clear guidelines for the issuance, custody, and conversion of payment tokens. According to Arushi Goel, Head of Middle East & Africa Policy at Chainalysis, these regulations are expected to foster greater participation and position the UAE as a favorable environment for crypto assets.
