- A new country has emerged as a leading destination for Bitcoin mining.
- The country has more than 30 free trade zones for crypto firms.
The crypto market has gained significant attention around the world. Countries are continuing to utilize digital assets and carry out strategies to attract traders, investors, and cryptocurrency companies. As the world continues its rapid shift towards digital currencies, the United Arab Emirates (UAE) has emerged as a leading destination for Bitcoin miners in the Middle East.
The United Arab Emirates is emerging as the prime destination for #bitcoin miners in the Middle East 🇦🇪
— Jaran Mellerud 🟧⛏️ (@JMellerud) July 5, 2023
Read this thread to learn more – and don't forget to read the entire article at the end. pic.twitter.com/393gh6HcA5
The process of mining requires substantial computational power. Bitcoin miners continued to choose the UAE as a favorable region with ideal conditions for mining. With its advanced infrastructure, favorable regulatory environment, and abundant renewable energy sources, the UAE is attracting crypto firms seeking to capitalize on the Bitcoin mining industry.
The United Arab Emirates is a Middle Eastern nation bordering the Persian Gulf that encourages business and entrepreneurship. Moreover, it is a country where people are curious about new technological advancements. With the massive advancements, UAE emerged on the global Bitcoin mining map in early 2023.
Establishing the UAE as a Key Player in Bitcoin Mining
In the past few years, two giga projects have emerged with the support of a local sovereign wealth fund. It established the UAE on the global Bitcoin mining map as a serious and ambitious player. This sovereign wealth fund has been in charge of all significant mining initiatives in the UAE in collaboration with established industry players like Marathon.
In late 2021, the digital asset arm of Abu Dhabi’s sovereign wealth fund (Zero Two) announced its partnership with the local Bitcoin mining platform Phoenix Technologies. The partnership is to build a 650 MW hydro-cooled mining farm in Abu Dhabi. The investment for the project is around $2 billion, making it the biggest investment in a single Bitcoin mining project.
Recently, Zero Two announced the second Bitcoin mining partnership with the US public miner Marathon. With the partnership, Zero Two and Marathon will build and operate two immersion-cooled Abu Dhabi facilities totaling 250 MW. In this project, Zero Two will own 200 MW and Marathon 50 MW.
Moreover, almost all mining activity in the nation occurs in Abu Dhabi, the largest and most energy-rich of the seven emirates. The UAE is a significant player in the global energy market. Currently, the country’s operational Bitcoin mining capacity is around 400 MW. The capacity is expected to surge to over 600 MW by the end of this year.
Free Trade Zones for Crypto Firms
Most importantly, the UAE is the country where Bitcoin miners may operate with the least taxation. The country has more than 30 free trade zones where Bitcoin miners can register in any one of them to avoid corporate tax, VAT, and import duties. This is a great advantage for the country in a competitive sector like Bitcoin mining.
As of now, there are no specific regulations for the Bitcoin mining sector. Except for the big semi-government projects, all the miners are currently operating in the legal gray zone. Moreover, the sector is expected to be regulated soon, with the country creating a licensing scheme. With all the advancements, the UAE is expected to become an important Bitcoin Mining country in the upcoming years.
UAE’s Dominance in Crypto Adoption
According to the report, Bitcoin miners made $184 million in fees during Q2 of 2023, an increase of 270% from the year 2022. Moreover, the Financial Index shared data showing that the UAE has become the country with the highest number of crypto users.
The data clearly shows that the UAE has the highest number of crypto users, with 27.67%. The recent developments and advancements make the UAE the leading crypto hub among other countries. The UAE’s tax benefits are one of the factors that have attracted a significant amount of foreign direct investment. With this innovation and crypto-friendly environment, the UAE is expected to achieve more significant milestones in the upcoming days.
Following the UAE, Vietnam takes second place with 20.53%. Singapore stands in third place with 13.93%. Moreover, Iran and the United States take the next two spots with 13.46% and 13.22%, respectively.
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