The UAE is rapidly cementing its status as a global powerhouse in the Web3 ecosystem, driven by visionary government initiatives, regulatory clarity, and surging investor interest, experts say.

As of mid-2025, Dubai alone hosts over 700 blockchain companies, with the broader UAE ecosystem comprising nearly 1,500 active Web3 organisations. The Dubai AI and Web3 Campus and Abu Dhabi's ADGM are spearheading innovation through licensing, infrastructure, and strategic funding. Regulatory bodies like VARA and RAK DAO have introduced pioneering frameworks for virtual assets and decentralised autonomous organisations (DAOs), attracting major players such as Binance and Crypto.

Boosted by these initiatives, the UAE blockchain market size is projected to grow at a CAGR of around 42 per cent between 2025 and 2030. In the past year alone, the UAE recorded $34 billion in digital asset inflows, a 42 per cent year-on-year increase, with adoption reaching nearly 30 per cent of the population.

Investment momentum is strong, with startups like TON Foundation and Farcana securing multimillion-dollar backing. With the Mena blockchain market projected to reach $40 billion by 2027, the UAE's dual approach - Dubai's agile commercial focus and Abu Dhabi's institutional infrastructure - is positioning the nation as a resilient and scalable hub for the decentralised future.

ADGM has been one of the first jurisdictions globally to create a comprehensive Virtual Assets Framework covering issuance, custody, exchange, settlement, and fund management. Unlike fragmented rules elsewhere, this framework provides a single, clear rulebook for digital assets under the Financial Services Regulatory Authority (FSRA). It has attracted a wave of leading players: Copper, Zodia Custody, Laser Digital (Nomura), HashKey, Binance, QCP Capital, and Coinbase have all established regulated entities or offices in ADGM.

“These moves validate Abu Dhabi as a trusted home for institutional-grade Web3 operations. For fund managers, the framework de-risks entry and allows them to build compliant structures for stablecoins, tokenised assets, and DeFi strategies within a regulated environment,” Kristiina Lumeste, Senior Executive Officer Klumi Ventures, told Khaleej Times.

“As a regulated Web3 venture capital (VC) fund licensed by FSRA and domiciled in ADGM, we at Hashgraph Ventures are particularly encouraged by the great progress the central bank is making and the important impact this will have on institutional adoption across global capital markets. The move by RAKBANK as the first UAE conventional bank to offer crypto trading to retail customers directly alongside traditional fiat is an example of first mover that will witness quick followers from all UAE national banks,” Stefan Deiss Co-Founder and Senior Executive of Hashgraph Ventures Management, told Khaleej Times.

UAE has already emerged as a global digital assets hub. Major ecosystem players call UAE their home today, including Hashgraph Ventures, Binance, and various other well-established players operating with strong presence in the Web3 space.

The regulatory maturity and proactive digital assets policy implemented by ADGM, DIFC, VARA, SCA, and CBUAE, have all created a structured regulatory ecosystem that offers legal certainty in digital assets for investors globally.

In addition, new stablecoin regulations further contribute to the positive evolution of digital assets in UAE, under the Payment Token Services Regulations introduced in 2024, and through the recent AED-backed stablecoin announced in Q2 2025.

Digital assets in the UAE are moving from experimentation to scale. Sovereign wealth funds, family offices, and corporates are increasingly integrating tokenisation and stablecoin solutions, with regulation enabling true institutional adoption.“Importantly, over 90 per cent of inflows across MENA now come from institutional and professional investors, underscoring the shift from retail speculation to institutional adoption. The Central Bank of the UAE's new Payment Token Services Regulation has opened the door for regulated AED- and USD-backed stablecoins, directly supporting corporate treasury, cross-border trade and banking innovation,” Lumeste said.

The regulatory environment and the strong motivation/leadership of the sovereigns make the transition more achievable in a shorter period. Capital deployments into Web3 and AI will continue to be the main catalyst that fuels and attracts some of the world's leading firms to set up operations, and in many cases, their global HQs in UAE, Deiss added.

ADGM's moves on Web3 are boosting investments in the sector in key ways –

. Regulatory framework: ADGM's FSRA offers a Virtual Asset Framework covering trading venues, custody, lending, digital asset fund management, tokenisation, staking, and derivatives, making it especially attractive for Web3 investors.

. Fund licensing: The Hashgraph Group (THG) obtained an ADGM VC fund manager licence for its global $100 million Web3 Fund (“Hashgraph Ventures Manager”).

. Services expansion: Zodia Markets, backed by Standard Chartered, also received regulatory approval to operate as virtual asset brokerage in Abu Dhabi and recently announced the acquisition of ADGM FSRA-licensed Web 3 custodian Tungsten.

Global venture capital inflows into crypto/Web3 projects surged to $5.4 billion in Q1 2025 with UAE as a key beneficiary of these capital investments.

Continuous regulatory clarity, ecosystem capacity, and technology advancement will attract more institutional investors and retail participation, in particular with mature and well-established Web3 protocols such as Hedera Hashgraph.

“The adoption of stablecoins and broader asset tokenisation will unlock new digital assets and investment diversification strategies and opportunities, including new structured financial products and services. Backing from sovereign capital and integrated infrastructure will position UAE to become a leading global Web3 and digital assets economy in the coming years,” Deiss said.

Globally, stablecoins now exceed $250 billion in circulation with more than $2 trillion in monthly transaction volumes, and ADGM is positioning itself at the center of this shift.“Over the next 3–5 years, we expect Abu Dhabi to host specialist Web3 funds, tokenised credit and real estate vehicles, and cross-border stablecoin payment platforms. With major global custodians, exchanges, and infrastructure firms already here, UAE is on track to become the preferred base for digital asset funds and capital markets in the Middle East,” Lumeste said.

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