The UAE Agriculture Authority has implemented a new rule that bans the mining of cryptocurrencies on farms. Farmers who are caught engaging in such activities will face fines of up to 10,000 UAE dirhams (around $2,722).
According to the advisory issued by the Abu Dhabi Agriculture and Food Safety Authority, using farms for cryptocurrency mining is considered a misuse of their intended purpose. To enforce this prohibition, penalties have been put in place, with fines of up to 10,000 UAE dirhams for those found mining cryptocurrencies on farms.
Cryptocurrency mining involves the use of computational power to solve complex mathematical puzzles and validate transactions on blockchain networks. Successful miners are rewarded with newly minted cryptocurrency, making mining a profitable venture. However, the energy-intensive nature of the process likely influenced the decision to restrict these activities on agricultural land, in order to preserve their intended use.
Despite this ban, the UAE has established itself as a supportive jurisdiction for Bitcoin mining. In 2023, it was reported that the UAE accounted for approximately 400 megawatts of Bitcoin mining capacity, representing 4% of the global hash rate. This makes the UAE one of the leading Bitcoin mining hubs in the Middle East, indicating a favorable environment for crypto activities outside of agricultural contexts.
While the UAE generally maintains a positive stance towards cryptocurrencies, other countries have implemented stricter regulations. Kuwait, for example, banned all cryptocurrency-related operations, including mining, as of July 18, 2023.
The UAE continues to be a crypto-friendly country, with $25 billion in crypto transactions recorded in 2022, according to a report by the Dubai Multi Commodities Centre (DMCC). The country aims to attract further investment by adopting accommodating regulatory policies.
Kadan Stadlemann, CTO of Komodo, has praised the UAE for its political stability and monarchy, stating that these factors create a more favorable environment for crypto businesses compared to the regulatory challenges faced in the US.
The Middle East is experiencing a surge in crypto adoption, with the average daily number of traders surpassing 500,000 in February 2024, a 51% increase from the previous year. The UAE leads the region in adoption per capita, with peak daily active users reaching 106,111 in 2024. Despite having a larger population, Saudi Arabia has slightly higher peak daily active users.
This growth in adoption is attributed to evolving views on how cryptocurrencies align with Islamic beliefs, as attitudes change with increased regulation in the crypto industry.
Bitget Research predicts that the number of daily active crypto users in the Middle East will continue to rise, reaching 700,000 by the end of 2024. The UAE is expected to become a central hub for cryptocurrency talent, capital, and enterprises, further increasing its global influence in the crypto market.
