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- A new nation has surfaced as a prominent hub for Bitcoin mining.
- This nation boasts over 30 free trade zones for cryptocurrency enterprises.
The cryptocurrency market has garnered considerable interest globally. Nations are increasingly leveraging digital assets and implementing strategies to draw in traders, investors, and cryptocurrency firms. As the global transition to digital currencies accelerates, the United Arab Emirates (UAE) has positioned itself as a key 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
Read this thread to learn more – and don't forget to read the entire article at the end. pic.twitter.com/393gh6HcA5— Jaran Mellerud
(@JMellerud) July 5, 2023
The mining process demands considerable computational resources. Bitcoin miners continue to favor the UAE as an advantageous location with optimal conditions for mining. With its sophisticated infrastructure, supportive regulatory framework, and plentiful renewable energy resources, the UAE is drawing in crypto firms eager to take advantage of the Bitcoin mining sector.
The United Arab Emirates is a Middle Eastern country adjacent to the Persian Gulf that promotes business and entrepreneurship. Additionally, it is a nation where there is a strong interest in new technological innovations. With significant advancements, the UAE emerged on the global Bitcoin mining landscape in early 2023.
Establishing the UAE as a Key Player in Bitcoin Mining
In recent years, two major projects have been initiated with the backing of a local sovereign wealth fund. This has positioned the UAE on the global Bitcoin mining map as a serious and ambitious contender. The sovereign wealth fund has overseen all major mining projects in the UAE in partnership with established industry players such as Marathon.
In late 2021, the digital asset division of Abu Dhabi’s sovereign wealth fund (Zero Two) announced its collaboration with the local Bitcoin mining platform Phoenix Technologies. This partnership aims to develop a 650 MW hydro-cooled mining facility in Abu Dhabi. The investment for this initiative is approximately $2 billion, marking it as the largest investment in a single Bitcoin mining project.
Recently, Zero Two revealed a second Bitcoin mining partnership with the US public miner Marathon. Through this collaboration, Zero Two and Marathon will construct and manage two immersion-cooled facilities in Abu Dhabi with a combined capacity of 250 MW. In this arrangement, Zero Two will control 200 MW while Marathon will manage 50 MW.
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Furthermore, nearly all mining operations in the country take place in Abu Dhabi, the largest and most energy-abundant of the seven emirates. The UAE plays a significant role in the global energy market. Currently, the nation’s operational Bitcoin mining capacity is around 400 MW, with expectations to exceed 600 MW by the end of this year.
Free Trade Zones for Crypto Firms
Crucially, the UAE is a nation where Bitcoin miners can operate with minimal taxation. The country features over 30 free trade zones where Bitcoin miners can register to avoid corporate tax, VAT, and import duties. This presents a substantial advantage for the nation in a competitive field like Bitcoin mining.
At present, there are no specific regulations governing the Bitcoin mining sector. Aside from the major semi-government projects, all miners are currently functioning within a legal gray area. Additionally, the sector is anticipated to be regulated soon, with the country developing a licensing framework. With these advancements, the UAE is poised to become a significant player in Bitcoin mining in the coming years.
UAE’s Dominance in Crypto Adoption
According to a report, Bitcoin miners generated $184 million in fees during Q2 of 2023, reflecting a 270% increase from 2022. Furthermore, the Financial Index provided data indicating that the UAE has emerged as the nation with the highest number of cryptocurrency users.
Top Countries Crypto Users Chart
The data clearly indicates that the UAE has the highest percentage of crypto users, at 27.67%. Recent developments and progress position the UAE as the foremost crypto hub among other nations. The UAE’s tax incentives are a key factor attracting substantial foreign direct investment. With this innovative and crypto-friendly atmosphere, the UAE is expected to reach more significant milestones in the near future.
Following the UAE, Vietnam ranks second with 20.53%. Singapore holds the third position with 13.93%. Additionally, Iran and the United States occupy the next two spots with 13.46% and 13.22%, respectively.
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