Crypto giants, including Coinbase, Circle, and Bittrex, are increasingly turning their attention away from the U.S. market and toward the Middle East and North Africa (MENA) region, with the United Arab Emirates (UAE) emerging as a favored destination.
The ongoing exodus of these major players from the U.S. is attributed to regulatory challenges and an unfavorable economic environment.
Silicon Valley’s shift to the Middle East
Coinbase CEO and Co-Founder Brian Armstrong is currently in the UAE, attending various meetings with policymakers, regulators, and other stakeholders.
He is also delivering a keynote address at the inaugural Dubai Fintech Summit, highlighting the potential of the UAE and the MENA region as a whole to serve as a strategic hub for Coinbase.
The company is working closely with Abu Dhabi Global Market (ADGM) regulators to expand its international exchange’s licensing and availability.
Coinbase is also engaging with Dubai’s Virtual Assets Regulatory Authority (VARA) to develop a comprehensive retail framework for virtual assets.
According to Coinbase, the MENA region is poised to become a leader in the development of a web3 ecosystem, attracting further investment in the space.
Circle and Bittrex follow suit
Circle, another U.S.-based company, has also shown interest in the UAE. Circle CEO Jeremy Allaire blamed the devaluation of its stablecoin, USD Coin, on regulatory challenges in the U.S. and concerns about its banking system during a Bloomberg interview.
The Securities and Exchange Commission (SEC) brought a lawsuit against Bittrex in March of 2023. This was due to Bittrex’s decision to terminate its services for American customers, which was made in response to challenging regulatory and economic circumstances.
Bittrex Global CEO Stephen Stonberg stated that the UAE and Dubai are among the friendliest jurisdictions for the cryptocurrency industry and that Dubai is likely to benefit from the expanding crypto market in the Middle East as local regulators increasingly accept blockchain-related technologies.
More and more companies in the cryptocurrency and blockchain industry are choosing to move away from the United States due to stricter regulations.
They want to make sure they follow the rules, but the legal landscape for these new technologies can be confusing. So, businesses are looking for places with clearer rules and more support for growth and innovation.
Last week, New York State Attorney General Letitia James proposed landmark legislation to impose stricter regulations on the cryptocurrency industry, aiming to protect investors, consumers, and the broader economy.
The proposed bill would increase transparency, eliminate conflicts of interest, and impose common-sense measures to protect investors.
The MENA region as the new haven for U.S. crypto companies
With the ongoing exodus of crypto and blockchain companies from the U.S., the MENA region, led by the UAE and Bahrain, is poised to become the new crypto Silicon Valley.
The Virtual Assets Regulatory Authority’s (VARA) recent regulations have generated buzz around Dubai’s virtual assets ecosystem.
Ali Jamal, CEO of UAE-based Cryptos Consultancy, a crypto and blockchain licensing firm, has noted a significant increase in inquiries from businesses interested in setting up virtual asset practices in Dubai.
As major crypto players continue to abandon the U.S. market in favor of the MENA region, the UAE is well-positioned to become a hub for innovation and investment in the rapidly evolving world of cryptocurrencies and blockchain technology.