Original Article Title: "Web3 Oasis in the Desert: Dubai's Digital Gold Dream"

Original Article Author: Bright, Foresight News

On March 12, 2025, Binance announced a $2 billion investment from the Abu Dhabi investment firm MGX. This is the largest institutional investment in the history of the crypto industry, sending a strong signal to the world that the Middle East, especially the UAE, is ambitiously building the cryptocurrency "Jerusalem."

With Token2049 Dubai around the corner, join the author in exploring this crypto Palm Island.

Chapter One: The Digital Mecca Between Two Oceans and Three Continents: Dubai's Geopolitical Cipher

Strategic Hub in the Desert

In the northeast corner of the Arabian Peninsula, the UAE is like a pearl nestled between the Persian Gulf and the Gulf of Oman. This federation of seven emirates occupies a strategic chokepoint connecting the three continents of Europe, Asia, and Africa. Dubai, the most dazzling city in this federation, has transformed from a modest desert fishing village into a global financial center in just 40 years.

This miraculous transformation was not accidental, as the geopolitical coordinates had long set the stage. Guarding the strategic chokepoint of the Strait of Hormuz and overlooking the global energy artery, Dubai is not only the heart of petrodollars but also a crossroads of East-West trade. In 2023, the UAE surpassed the UK to become the world's second-largest gold trading center, with a trade volume exceeding $129 billion. According to data from the Dubai Multi Commodities Centre (DMCC), Dubai accounts for 15% of the annual global gold trade.

Dubai's geopolitical strategy has always revolved around the core tenet of "having no position is a position." As a member of the Gulf Cooperation Council (GCC), the UAE maintains neutrality in regional power dynamics, adhering to Western sanctions against Russia while absorbing flight-to-safety capital stemming from the Russia-Ukraine conflict, fueling a property boom at the end of 2022. This "all-encompassing" diplomacy has made Dubai a haven for wealth and clandestine transactions. Following the reconciliation between Iran and Saudi Arabia in 2023, Dubai's position as a thoroughfare was further solidified.

Dubai's Web3 "geopolitics" is also reflected in its relaxed regulatory environment, which has a gravitational pull on global talent. After the Monetary Authority of Singapore announced a crackdown on crypto speculation in September 2023, Chinese practitioners began turning their sights to Dubai, with industry professionals admitting, "Singapore is good for finance, but not for projects. VC funding is limited. For projects, Dubai is the place to be." Starting in April 2022, the Indian government imposed a high 30% tax rate on crypto gains, followed by an additional 1% tax on electronic asset buyers in July of the same year. A typical case is Sandeep Nailwal, the co-founder of Polygon, who reluctantly left India in 2020 and settled in Dubai, stating, "I wanted to build a better Web3 platform in India, but the chaotic regulatory environment left me no choice."

Departing from Dubai and leveraging the world's largest airline, Emirates, cryptocurrency enthusiasts can easily fly to other Web3 hubs such as Singapore, Switzerland, Portugal, Hong Kong, North America, and more to attend conferences, weaving a network of Web3 air routes. This geopolitical advantage has made Dubai the "Digital Mecca" for global Web3 talent and capital.

Residents of the Crypto Hotbed

As of September 2024, the UAE's population is 12.5 million, with expatriates accounting for 88%. Dubai's population is 3.76 million, making up 41.9% of the total population of the country, with a population density eight times higher than the national average. According to a study by the UAE's telecommunications regulatory authority TDRA, approximately 11.4% of residents own or invest in cryptocurrency, placing the UAE among the top ten countries globally with the most cryptocurrency investment residents.

Dubai's crypto users are characterized by their youthfulness and high income. A YouGov survey shows that 66% of UAE adults are interested in cryptocurrency, with 11.4% of residents holding or investing, ranking among the top ten globally. Research by Holborn Assets indicates that users aged 18-30 (30%) and 30-40 (45%) dominate, with Emiratis (33%) more interested in investing than Arab expatriates (23%), Asian residents (24%), and Westerners (19%). 59% of users see cryptocurrency as a long-term investment, 35% for portfolio diversification, 11% for inflation hedging, 34% for short-term trading, and 22% for daily payments. Bitcoin (72%) is hailed as the "digital gold," Ethereum (52%) is favored for its smart contract functionality, and stablecoins (45%) rank third. 24% of users are interested in infrastructure projects, 21% invest in Layer 1 blockchains, and 22% are bullish on AI-related crypto projects. The usage rates of CEX (45.7%) and DEX (48.4%) are similar, with eToro being popular among beginners, OKX leading in derivative liquidity, Binance offering the most token variety, and dydx and Uniswap leading in DEX trading volume. 37% of users believe blockchain will revolutionize real estate transactions, reducing friction in purchases.

Dubai is also a melting pot of multiculturalism. Even without a common language, expatriates can live and even start businesses here with ease, thanks to the widespread use of UnionPay cards and the rapid development of FinTech. Cryptocurrency is already circulating in many scenarios in Dubai, from luxury hotels to street shops, further solidifying residents' confidence in Web3. However, Dubai's population structure is quite unique. According to the Dubai Government Office, over 80% of Dubai's population are foreign laborers, mainly of Indian and Pakistani descent, with a very low percentage of locals who heavily rely on national welfare. This population structure has made Dubai's Web3 ecosystem more like a global experiment playground rather than a locally-driven market.

Dubai's immigration policy has further strengthened its "money-first" characteristic. Non-Muslims can hardly obtain citizenship and can at most obtain long-term residency through a "Golden Visa." For example, investing 2 million dirhams (about 540,000 USD) in real estate can exchange for a ten-year residency permit, leading to the emergence of "visa-sized" apartments specifically designed for investors on Palm Jumeirah, some of which even come equipped with Bitcoin mining machines. In 2023, a retired Shanghai teacher used their pension to purchase two bathrooms in the Zhumela Lake Tower, jokingly referring to it as a "toilet mining farm," and live-streamed the "appreciation journey" in a WeChat group, with the latest episode discussing how to mine using a toilet tank. This absurd example reflects Dubai's utmost tolerance for capital: as long as you have money, there will always be a place for you here.

II. The Cryptic Revelation of the "Post-Oil Era": Dubai's Future Civilizational Philosophy

The DIFC Embracing Maritime Law and Its Lighthouse, VARA

In the "wild west" of cryptocurrency, Dubai has chosen a path of bold innovation. The UAE's legal system is based on civil law and Islamic law, focusing on written law and religious compliance, widely applied to personal status law (such as marriage, divorce, inheritance) and commercial activities, and is relatively conservative with an Islamic touch.

To promote financial industry growth and attract international investment, Dubai established the Dubai International Financial Centre (DIFC) in 2004 and introduced a maritime law system based on English common law. This additional legal framework allows Dubai to create an international, flexible legal environment suitable for the development of financial technology, blockchain, and digital assets.

Established in 2022, the Virtual Asset Regulatory Authority (VARA) is a leading creation under DIFC's unique legal system. It can be considered the world's first comprehensive virtual asset regulatory agency. It not only establishes rules but also plays the role of an innovation catalyst. Through a "sandbox regulation" model, VARA has found the golden mean between compliance and freedom.

VARA's triple mission is clear:

· Investor Protection: Requires exchanges to custody client assets, strictly enforce anti-money laundering (AML) and know-your-customer (KYC) procedures;

· Technology Neutrality: Does not preset a technological path and allows various forms such as blockchain, Web3, DeFi to coexist;

· Innovation Incentive: Establishes a regulatory sandbox for startups to test new products in a controlled environment.

Unlike the U.S. SEC's "securitization regulation," VARA's classification of crypto assets is more flexible. Bitcoin can be viewed as a commodity, platform coins can be seen as securities, determined specifically by the project's white paper and actual use case. This flexibility has attracted head exchanges such as Binance, Coinbase, Bybit to establish a presence. Meanwhile, DIFC supports a "sandbox testing" mode, allowing new financial products to be tested in a controlled environment. For example, in 2024, DIFC introduced the world's first "Digital Assets Law," pioneering legal certainty for fintech and digital assets.

The licensing efficiency of VARA can be likened to "Dubai Speed." There's a joke that getting a cryptocurrency license in Dubai is easier than getting a taxi license; the slogan "In Crypto We Trust" had its price secretly noted long ago. However, objectively speaking, as an industry expert mentioned during Token2049, "Compared to Singapore and Hong Kong, Dubai's regulation is more friendly and can better reach end users." This relaxed regulatory environment has increasingly made Dubai the preferred location for cryptocurrency projects, with even street vendors selling shawarma displaying QR codes accepting USDT, as if the whole city is hosting a decentralized barbecue party.

The Islamic Compliance Crypto Ecosystem

The Islamic financial system is based on the core principles of the Quran and Sunnah, emphasizing the prohibition of interest (Riba), risk-sharing (Mudarabah/Musharaka), and asset-backed financing. Its unique religious characteristics combined with modern financial practices are quite complex, and any lack of compliance could potentially trigger a systemic crisis.

Dubai's regulatory innovation is not only reflected in technological advancements but is deeply rooted in cultural adaptability. In 2023, VARA collaborated with the Islamic Financial Services Board (IFSB) to release the "Cryptocurrency Islamic Compliance Guidelines," injecting a unique religious aspect into the cryptocurrency ecosystem. The guidelines state:

· Prohibiting investment in blockchain projects involving gambling, alcohol, and other prohibited substances;

· Stablecoins must be backed by Islamic-compliant assets (such as gold and real estate);

· Smart contracts must adhere to the "freedom of contract" principle in Islamic law.

This "religion + technology" dual-compliance setup has made Dubai a gateway for cryptocurrency in the Islamic world. Traditional Islamic finance prohibits interest (Riba) and uncertainty (Gharar), emphasizes risk-sharing, while the decentralized and smart contract features of cryptocurrency align with these principles. As early as 2018, the Dubai Islamic Bank (DIB) introduced compliant cryptocurrency custody services, defining Bitcoin as "digital gold," cleverly avoiding interest taboos. The Islamic DeFi platform Amanah, built on the Polygon chain, offers Sharia-compliant staking and lending services with an annual return rate of approximately 3.5%, attracting wealthy individuals from the Middle East. This tension and fusion constitute the unique charm of the Middle Eastern cryptocurrency ecosystem.

The Resonating Blueprint of AI and Web3

Dubai's ambitions go far beyond this. In 2024, the DIFC launched the "Dubai AI & Web 3.0 Campus" to create the largest AI cluster in the Middle East and North Africa region. This campus, located in the DIFC Innovation One building, focuses on the future applications of AI and Web3 in key industries, attracting many entrepreneurs and engineers. As a result, Dubai ranked sixth in the fintech sector of the Global Financial Centres Index (GFCI) in 2021 and eighth overall. Unlike traditional financial centers such as New York, London, and Shanghai, Dubai's rise largely depends on the boost from the crypto economy.

As early as 2013, the UAE launched the "Smart Dubai" initiative to leverage blockchain to enhance government efficiency, driving its evolution from a payment tool (1.0) to financial applications (2.0), and further to government management (3.0). Today, this vision has begun to take shape. The "2030 Digital Economy Strategy," released in 2021, proposes to establish Dubai as a global blockchain hub, creating $150 billion in economic value. In 2023, Dubai further introduced the "Metaverse Strategy," aiming to become the capital of the virtual world. This transformation from an "oil economy" to a "digital civilization" stems from a deep insight into the post-oil era. As the Ruler of Dubai puts it, "No one will remember the world's second. " In the Web3 race, Dubai vows to be the first.

A New Global Money Laundering Center?

However, Dubai's forward-looking regulatory policies have naturally sparked controversy, with nicknames such as the "global money laundering center" and "virtual asset liquidity optimization hub" raising questions about its legitimacy. The boundary between innovation and fraud is not clear in this city without a stance.

The UAE's rulers can be considered the world's largest "hedge fund managers." They openly sell underground oil while, at the same time, stack the wealth illusion in the sky-high "oil wells" made of glittering gold and dollars, ultimately injecting the steady stream of foot traffic's credit card bills into the new "oil pipeline."

Dubai offers an illusion to all visitors. Wealthy individuals flock in with illicit funds, easily "whitewashing" them through real estate and investments. In 2024, the UAE attracted the highest number of millionaires with a net worth of over a million dollars, far surpassing the United States. And for those who have nothing but dreams of overnight wealth, the prevalence of fraud zones such as "Las Seahorse" and "Oasis," with electric batons and iron cage setups, is on the rise.

In 2023, Dubai's Crown Prince's announcement of the "Metaverse Strategy" further demonstrates Dubai's ability to monetize illusions. From the mirage in the desert to NFT trading and virtual land of government buildings, Dubai has always been at the forefront of the integration of the real and virtual. When you talk money with the rulers, they will pat you on the shoulder and assure you, "We don't care about money, only about dreams," because the casino always belongs to them. Whether it's oil or Bitcoin, global gold diggers will ultimately kneel beneath the Burj Khalifa.

III. The Cyber Frontline of Palm Jumeirah: Dubai's Cryptocurrency Industry Ecology

Dubai's Web3 ecosystem, like the artificial miracle on Palm Jumeirah, is a cyberspace oasis nurtured by code, capital, and ambition. From the USDT QR code at a street shawarma stand to Bitcoin payments at a sailboat hotel, this city has integrated cryptocurrency into the capillaries of life, creating a digital frontline where the real and virtual converge.

The Dubai Heat of Top-tier Exchanges: The Desert Hub of Global Giants

Just as the Ottoman Empire disrupted trade routes, ushering in the Age of Discovery, a global regulatory storm has propelled Dubai into the Web3 arena. In November 2022, Binance secured a Financial Services Permission (FSP) from the Abu Dhabi Global Market (ADGM) Financial Services Regulatory Authority (FSRA), marking a milestone in its expansion into the Middle East and North Africa (MENA) market. In 2025, Binance received a further $20 billion investment from Abu Dhabi's MGX, led by royal core member Tahnoun bin Zayed Al Nahyan. This massive investment not only represented a turning point in Binance's development history but also signaled deep Emirati capital backing for Web3. MGX, under the Abu Dhabi Artificial Intelligence & Technology Council (AIATC), previously invested in OpenAI and Anthropic, showcasing its cross-domain ambitions from AI to blockchain.

Other top players have followed suit. Bybit, Coinbase, OKX, HTX, among others, have established headquarters or branches in Dubai. In October 2024, OKX obtained a Virtual Asset Regulatory Authority (VARA) license, becoming the latest compliant exchange. In 2020, Ripple set up a regional headquarters in the Dubai International Financial Centre (DIFC) to evade regulatory pressure from the U.S. SEC. Teaming up with Emirates NBD, Ripple shortened cross-border remittance times from the Middle East to Southeast Asia from 3 days to 3 seconds, demonstrating blockchain's practical value. In 2022, Kraken became the first exchange to offer direct AED trading, reducing the entry barrier for local users. Asset management institutions like Cobo and Amber have also accelerated their expansion, applying for SCA and VARA licenses since 2020 to target wealth management needs in the MENA market.

Dubai is not the largest crypto market in the Middle East—Saudi Arabia ranks third in population and trading volume, while the UAE ranks fifth. However, Dubai has become the regional "front office" due to its regulatory clarity and infrastructure advantages. In 2023, a Bitget report showed a 166% surge in crypto adoption in the Middle East, with the UAE leading with 7% of global trading volume and $250 billion in transactions. Chainalysis data further indicated that Dubai's crypto industry contributes approximately AED 100 billion ($27.25 billion) to the country's GDP, accounting for 4.3%. As of 2024, Dubai has attracted over 1,400 blockchain startups with a total valuation of $24.5 billion, forming a closed-loop ecosystem with over 90 investment funds and 12 incubators. The Dubai Multi Commodities Centre (DMCC) hosts 460 local blockchain companies in its Crypto Centre, representing over half of the city's total, while the Swiss Crypto Valley has established the Crypto Oasis here, connecting the two major crypto hubs.

Token2049 and Industry Summit: The Crypto Community's Victoria's Secret Fashion Show

Token2049 Dubai is a global Web3 industry barometer, bringing together exchange executives, on-chain developers, venture capitalists, and policymakers. During the 2024 summit, the marina outside the sailboat hotel was filled with a Lamborghini fleet, Russian models wearing exchange logo bikinis were distributing flyers, and a South Korean GameFi project team was showering "fractionalized NFTs" at a pool party, resembling a "Victoria's Secret Fashion Show of the Crypto Community." Inside the venue, VARA officials shared the stage with Binance CEO Changpeng Zhao to discuss the future of regulatory sandboxes and CBDCs; outside the venue, the DJ at the Palm Island nightclub used smart contracts to real-time distribute ticket proceeds, showcasing the impressive on-chain transparency. The summit was not only a feast of technology and capital but also a microcosm of Dubai's "build it and they will come" strategy.

The summit frenzy in Dubai goes far beyond this. In October 2023, the Gitex Technology Exhibition featured a Blockchain and Metaverse Pavilion that attracted professionals from Asia Token2049, showcasing cutting-edge projects ranging from decentralized identity verification to AI-driven DeFi protocols. The Dubai FinTech Summit in May 2024 welcomed over 10,000 decision-makers, 300+ thought leaders, and 200+ exhibitors, focusing on the payment revolution and on-chain finance. The 2023 Middle East Metaverse Summit brought together 300 experts from over 40 organizations to explore the strategic applications of virtual real estate and cultural digitization. These summits are not just stages for technology showcases but also tentacles linking Dubai to the global Web3 network.

The events in Dubai also demonstrate its language and cultural advantages. UAE officials' fluent English and global vision shone brightly at events like Gitex, contrasting with the somewhat struggling English expressions of some Chinese Web3 project teams. A Binance executive was once criticized for his accent at an event, highlighting Dubai's high expectations for international communication. Through summits and roadshows, DIFC's FinTech Hive incubator and the Dubai Future District Fund (backed by a 1 billion dirham investment from the Sheikh in 2020) accurately capture innovative projects, incubating 584 startups in 2023 covering payments, on-chain finance, and metaverse applications.

Dubai's Unique Crypto Applications and Scenarios: A Digital Life from Street to Cloud

Payment Revolution: On-Chain Transactions from Shawarma to Mansions

Dubai's payment ecosystem is integrating cryptocurrency into daily life. In Dubai Mall's aquarium, sharks swim as a Bitcoin candlestick chart flickers on a screen, and there are more cryptocurrency ATMs than public restrooms. A street shawarma stand displays a "Accepting USDT" QR code, and tourists use the BitOasis platform to convert to dirhams, paying for their stay at the Burj Al Arab hotel. In 2023, Cartier and Rolex stores began supporting USDT settlements, further blockchainizing high-end consumption scenarios. Citizens School became the first school in the Middle East to accept Bitcoin and Ethereum for tuition fees, with parents joking, "Paying tuition fees with ETH, children are learning Web3 thinking."

Real estate is a key player in cryptocurrency payments. In 2023, developers accepted Dogecoin for home purchases, and the Kiklabb licensing organization supported cryptocurrency payments. A YouGov survey shows that 40% of users consider cryptocurrency an efficient means of cross-border remittance, 36% are willing to shop with a cryptocurrency card, and 20% are interested in cryptocurrency gifts. In 2019, the Rixos Premium Hotel installed Dubai's first Bitcoin ATM, allowing visitors to purchase Bitcoin directly with cash. In 2023, LucidPay launched a Tezos-based stablecoin, some hospitals accepted Bitcoin donations, and the transparency of blockchain payments reduced the trust cost in the charity sector. In 2022, a black diamond was sold for $4.3 million in a crypto auction, and the buyer Richard Hert paid with Bitcoin, sparking discussions.

The collaboration between Ripple and ENBD has improved cross-border remittance efficiency to seconds. Data from 2023 shows that 64% of Middle Eastern payment companies expect that over half of merchants will accept cryptocurrency payments in the next three years. In 2024, a report from the Deel platform shows that Dubai employees have the highest cryptocurrency withdrawal rate in the Middle East, with Ethereum accounting for 51%, followed closely by USDC and Bitcoin. This payment ecosystem is not only a technological advancement but also Dubai's strategic response to the shadow of the SWIFT system sanctions, with the borderless nature of cryptocurrency becoming an alternative to the dominance of the US dollar.

Blockchain Gaming and NFTs: Starting from One Thousand and One Nights

The metaverse strategy is Dubai's grand narrative. In 2022, Crown Prince of Dubai Hamdan announced a five-year metaverse plan, aiming to rank among the top ten global metaverse economies, attract over 1,000 companies, and create 40,000 virtual jobs. In 2023, Dubai Electricity and Water Authority (DEWA) launched the DEWAverse metaverse platform, allowing customers to pay bills in a virtual space and employees to receive on-chain training. In 2024, the BEDU company unveiled Project 2117 at the Dubai Future Museum, aiming to attract 1 billion users to its metaverse ecosystem within ten years, covering education, art, and social interactions.

VARA showcased the regulatory foresight in 2022 by purchasing virtual land in The Sandbox, becoming the world's first regulatory agency headquarters in the metaverse. In 2023, Wemade and Whampoa Digital launched a $100 million Web3 Fund focusing on the metaverse and blockchain games. ResearchAndMarkets predicts that the Dubai NFT market will experience a compound annual growth rate of 32.1% from 2022 to 2028.

The metaverse-based Dubai Chain Game ecosystem has become a new frontier for UAE cultural exports. In 2024, the UAE created the "Metaverse Gaming Valley," attracting top projects such as Axie Infinity and Decentraland. The "Sinbad's Voyage" NFT, based on "One Thousand and One Nights," allows players to purchase virtual land linked to Dubai landmarks like the Burj Khalifa, where land value appreciates tied to real estate. In 2023, a virtual plot on Palm Jumeirah was sold for 15 ETH. The Middle East Esports Alliance based on Polygon rewards players with cryptocurrency, with the champion of a Dubai esports tournament in 2024 receiving a 2 BTC prize, and the live viewership exceeding 5 million.

Foundation of the Ecosystem: Policy Support and Infrastructure

Dubai's crypto ecosystem has benefited from the government's forward-thinking policies. The 2013 "Smart Dubai Initiative" initiated blockchain government applications, the Global Blockchain Council was established in 2016, and a commitment was made in 2018 to have 50% of government services on-chain by 2021. In 2022, VARA was established, using a "Test-Adapt-Scale" model, covering giants like Binance, OKX, and Huobi within six months. In 2023, DIFC introduced the "Digital Assets Law" to provide legal support for on-chain finance. Through tax exemptions and incubation support, DMCC's Crypto Centre and Dubai Future Foundation (established in 2016) have attracted 584 startups and issued over 100,000 "Golden Visas."

In terms of infrastructure, Dubai's global network and logistical advantages are unparalleled. UAE Airlines connect to global Web3 hubs, Dubai Port leads the Middle East in throughput, supporting cross-border payments and hardware supply chains. In 2023, Dubai's 772 crypto companies provided employment opportunities, and PwC estimates the MENA blockchain market will surpass $3.2 billion in 2024. The Dubai Chamber of Commerce & Industry (established in 1965) sub-entity, the Digital Economy Sector, expands its user base through women's entrepreneurship programs and metaverse education.

Dubai's crypto ecosystem is not only a technology testbed but also a convergence of capital and culture. From the streets to the cloud, this city is rewriting "One Thousand and One Nights" with blockchain, where every token, every transaction, is a cyber prophecy of the future.

Reference Articles, Special Thanks

1. "Dubai: Bitcoin and Mirage in the Desert"

2. "Dubai's Blockchain Revolution in 2024: Growth and Challenge Analysis"

3. "In Dubai, I Saw the Future Sneeze"

4. "Mankiw Research | Decrypting Dubai DFSA's Release of RWA Regulatory Sandbox Guidelines"

5. "Dubai Crypto Market Research Report: The Light of the Middle East's Crypto Industry"

6. "The Oasis in the Desert: Dubai's Blockchain Ambition and Challenges"

7. "Dubai, the City of Web3 for 200,000 Chinese: Asia's Other Web3 Capital"

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