UAE Bans Cryptocurrency Mining on Farms, Imposes Fines
The Abu Dhabi Agriculture and Food Safety Authority of the UAE has issued a new advisory that prohibits the use of farms for cryptocurrency mining. Those caught engaging in such activities can face fines of up to 10,000 UAE dirhams (approximately $2,722).
The advisory explicitly states that farms cannot be repurposed for cryptocurrency mining. The government agency considers this a “misuse of the farm for purposes other than its intended use.” To enforce this prohibition, penalties are imposed for non-compliance, with fines of up to 10,000 UAE dirhams for individuals caught 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 lucrative endeavor for many. The energy-intensive nature of the process likely influenced the decision to restrict such activities on agricultural land in order to preserve its intended use.
Despite this specific prohibition, the UAE has established itself as a supportive jurisdiction for Bitcoin mining. In 2023, data indicated 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, demonstrating a favorable environment for crypto activities outside of agricultural contexts.
While the UAE maintains a generally positive stance towards cryptocurrency, other countries have adopted stricter regulations. Kuwait, for example, banned all cryptocurrency-related operations, including mining, as of July 18, 2023.
According to a Dubai Multi Commodities Centre (DMCC) report, the UAE recorded $25 billion in crypto transactions in 2022 and is now seeking further investment by adopting accommodating regulatory policies.
Komodo CTO Kadan Stadlemann recently praised the United Arab Emirates (UAE) for its political stability and monarchy, which he believes 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 its larger population, Saudi Arabia has slightly higher peak daily active users.
The growth in adoption is attributed to evolving views on how crypto aligns with Islamic beliefs, with attitudes changing as cryptocurrencies become more regulated.
Bitget Research forecasts 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, increasing its global crypto influence.