emirates7 - A recent study by Henley and Partners revealed that a significant number of UAE residents hold digital currencies, placing the Emirates third globally in cryptocurrency adoption. This ranking surpasses that of countries like the US, UK, Australia, Canada, Switzerland, New Zealand, Austria, and Italy, with only Singapore and Hong Kong ahead.

The report highlights the UAE as a prime destination for crypto investors, ranking third in the Henley Crypto Adoption Index 2024. This high level of public interest in cryptocurrencies is supported by strong government backing and a vibrant start-up ecosystem. The UAE’s favorable tax environment, combined with a digitally advanced and affluent population, makes it an appealing location for crypto-related businesses.

Cryptocurrency usage in the UAE is expanding across various sectors, including retail and real estate. In a groundbreaking decision earlier this month, a Dubai court ruled that salaries could be paid in cryptocurrency if both employer and employee agree.

Additionally, Phoenix Group, listed on the Abu Dhabi Securities Exchange, and digital asset firm Tether have announced plans to introduce a stablecoin pegged to the UAE dirham early next year. This move aims to leverage the stability of the UAE currency, meet the rising demand for digital assets, and tap into the global stablecoins market.

The Middle East, and particularly the UAE, continues to draw crypto wealth due to its zero capital gains tax and forward-thinking regulations. Dubai’s longstanding support for cryptocurrencies, exemplified by its approval of the first cryptocurrency fund in the region in 2021, further cements its reputation as a hub for crypto investors. The recent decision allowing residents to trade cryptocurrencies directly through their bank accounts marks a significant advancement towards widespread adoption, according to Dominic Volek, group head of private clients at Henley and Partners.

Public adoption of cryptocurrencies in the UAE is gauged by factors such as the percentage of crypto users within the total population, the absolute number of crypto owners, and online search interest in cryptocurrencies. A higher rate of public adoption signals a more favorable environment for crypto.

Peter Ferrigno, director of tax services at Henley and Partners, noted that the UAE, alongside the Cayman Islands, is among the most crypto-friendly countries due to the absence of capital gains and income taxes, making them attractive for all asset classes.

Globally, there are now 172,300 individuals with over $1 million in crypto assets, a 95% increase from the previous year. The number of Bitcoin millionaires has risen by 111% to 85,400, as reported in the Crypto Wealth Report 2024 by Henley and Partners. Andrew Amoils, head of research at New World Wealth, pointed out that the millionaire bracket performed best over the past year, with billionaire growth mainly driven by Bitcoin. Of the six new crypto billionaires created this year, five were Bitcoin investors, highlighting its appeal to those making substantial long-term investments.