The crypto sector in the United Arab Emirates (UAE) is on track to become its second-largest industry in the next five years, due to the country’s regulatory policies and attractive business environment, according to Chase Ergen, a board member of publicly traded digital asset investment firm DeFi Technologies.

“They have a reputation for leadership, legislation, and community,” Ergen told Cointelegraph in an interview. He also predicted:

“They sell oil, that’s their main business. I think their second-biggest business is going to be the blockchain industry in the next five years. This will start to be double-digit parts of the economy.”

The country has a clear crypto regulatory framework, a community of key crypto industry executives, a debt-free economy that allows the government to funnel surplus into tech investments, low crime, attractive tax policies, and forward-thinking leadership, Ergen added. 

The UAE has created a moat that has made it the undisputed hub for crypto and tech in the Middle East and Africa (MENA) amid growing nation-state adoption of crypto and the race between sovereign powers to become global leaders in the digital finance age.

Related: Dubai and UAE move to align crypto frameworks under new partnership

Nation-state crypto adoption ramps up in 2025

Nation-state crypto adoption accelerated in 2025, following the inauguration of president Donald Trump in the United States and the regulatory shift that followed.

The Trump White House released its long-promised crypto report in July, outlining the administration’s plan to make the US the global leader in crypto.

Pakistan’s government reversed its long-held opposition to cryptocurrencies in November 2024, one day before the US presidential election.

Since that time, Pakistan has established a national Bitcoin reserve and appointed a national crypto council to craft a comprehensive digital asset regulatory framework within the country.

Sovereign wealth funds, including the UAE’s Mubadala and Norway’s sovereign fund, have exposure to Bitcoin (BTC) through exchange-traded funds (ETFs) and other investment vehicles.

Norway’s sovereign wealth fund, the largest state-directed investment fund of its kind in the world, increased its Bitcoin exposure by 192% over the last year, according to crypto research firm K33.

Magazine: Saudi Arabia’s Riyadh may be crypto’s sleeping giant: Crypto City Guide