UAE’s Digital Asset Achievements in 2024: A Year of Leadership and Challenges
In 2024, the UAE reaffirmed its position as a global leader in digital assets. Through groundbreaking regulatory advancements, innovative banking strategies, and licensing expansions for major crypto exchanges, the country showcased its commitment to building a robust digital economy. From stablecoin regulations by the Central Bank to bold initiatives by Zand Bank and VARA’s expanding portfolio, the UAE digital assets ecosystem continues to thrive as a model of innovation and compliance.
However, challenges remain. With the United States poised to transform into a crypto-friendly powerhouse under its new administration, and regions like Singapore and the European Union refining their own frameworks, the UAE must accelerate its progress to maintain its competitive edge. This year-end review highlights the UAE’s key achievements in digital assets throughout 2024 and outlines the opportunities that lie ahead in 2025.
Regulatory Achievements
Stablecoin Regulations: A Significant Step Forward
The Central Bank of the UAE (CBUAE) made headlines in 2024 with the introduction of comprehensive stablecoin regulations, a key milestone for the UAE digital assets ecosystem. These regulations provide a framework for integrating digital payment tokens into the economy, signaling a forward-thinking approach to blockchain innovation.
Among the standout developments was the approval of Coin AE, the first AED-backed stablecoin licensed by the Central Bank. Issued in partnership with Mbank, Coin AE sets a benchmark for future projects and reflects the UAE’s commitment to fostering a secure and compliant digital asset environment.
Despite this progress, gaps remain. Over five applications for stablecoin approvals are still under review by the Central Bank, and the regulatory requirement for foreign currency-backed stablecoins to register remains unenforced. Issuers such as Circle, which registered with ADGM earlier this year, have demonstrated readiness for compliance, but clarity on enforcement will be crucial in the coming months.
VARA: Expanding a Global Portfolio
Dubai’s Virtual Assets Regulatory Authority (VARA) continued to strengthen its leadership in the UAE digital assets landscape by licensing major global exchanges in 2024, including Binance, OKX, Crypto.com, and Bitpanda. These additions to VARA’s portfolio cemented Dubai’s reputation as a hub for tier-one digital asset players. Regional leaders like CoinMena and global platforms like GCEX further diversified the ecosystem, balancing retail and institutional needs.
A noteworthy event was the acquisition of BitOasis, a VARA-licensed exchange, by an international entity. This marked the first-ever takeover of a UAE-based crypto platform, underscoring the global interest in the UAE digital assets sector and the value of its regulatory clarity.
In December 18, VARA was linked to the launch of ORO, a tokenized gold product developed on Fasset Exchange’s Layer 2 network. The project, which claims to bring $1 billion worth of tokenized gold on-chain, reflects the growing interest in integrating blockchain with real-world assets. However, tokenization remains an area in development for VARA, as no formal announcements regarding approvals for ORO or similar projects have been made. This cautious approach indicates VARA’s commitment to building a comprehensive framework before scaling tokenization initiatives.
ADGM: A Pioneer in Blockchain Regulation
Abu Dhabi Global Market (ADGM) continued to lead in regulatory innovation for UAE digital assets in 2024. It introduced a framework for foreign currency-backed stablecoins, providing issuers with a clear and structured pathway for compliance. A highlight was the waiver granted to Paxos for its yield-bearing stablecoin Lift Dollar, demonstrating ADGM’s adaptability and willingness to support innovation even before finalizing its new regulations.
ADGM also made strides in attracting global blockchain projects, welcoming the IOTA Foundation and, more recently, the TON Foundation into its ecosystem. With its DLT Foundation Regime, ADGM is poised to remain a dominant player in blockchain governance. However, competition is intensifying with the emergence of RAK DAO and its DARe framework, which provides a legal structure for Decentralized Autonomous Organizations (DAOs).
Banking and Digital Assets: Progress Amid Caution
Zand Bank: Leading the Charge
Among UAE banks, Zand Bank emerged as a leader in 2024, championing the integration of traditional finance and blockchain. As the first digital-only bank to receive a custodian license from VARA, Zand has become the banking partner of choice for nearly all VARA-licensed VASPs. Its ability to navigate regulatory challenges and offer client account services has made Zand an essential pillar of the UAE digital assets ecosystem.
A Reserved Sector
While Zand Bank has embraced digital assets, many traditional banks remain cautious. M2, a leading exchange, recently announced its partnership with “leading banking institutions” to enable an AED on-ramp for digital assets. However, the PR avoided naming its partner, highlighting the hesitancy of banks to publicly associate with the sector.
Banks such as Commercial Bank of Dubai (CBD) and RAK Bank have shown interest in exploring opportunities in digital assets, but substantial progress remains limited especially when it comes to on-ramp off-ramp activities and client bank accounts for VASPs. Mbank, after its involvement in Coin AE, is expected to take a more active role in 2025 as blockchain integration accelerates across the financial system.
Looking Ahead to 2025
The year 2025 is set to be transformative for UAE digital assets, with stablecoin & payments expected to dominate the landscape. Stablecoin regulations are likely to see greater enforcement, while more approvals will enable broader adoption. Fintech companies and payment applications are poised to integrate more deeply with the blockchain ecosystem, paving the way for seamless solutions. Licensing activity from VARA and ADGM is also expected to increase as their regulatory teams expand, fostering innovation and trust.
The UAE must continue to push forward, especially as the United States under its new administration plans to become a crypto-friendly powerhouse. With its robust infrastructure and visionary leadership, the UAE has the opportunity to solidify its global position by advancing tokenization, enhancing collaboration between blockchain and traditional finance, and setting the standard for regulatory excellence.
The groundwork has been laid, but the journey ahead will determine whether the UAE can remain a leader in the rapidly evolving world of digital assets.
