UAE Agriculture Authority Bans Cryptocurrency Mining on Farms
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The Abu Dhabi Agriculture and Food Safety Authority of UAE issued a new advisory on Thursday prohibiting the use of farms for cryptocurrency mining. Farmers caught engaging in such activities face fines of up to 10,000 UAE dirhams (approximately $2,722).The Abu Dhabi Agriculture and Food Safety Authority advisory explicitly stated that farms cannot be repurposed for cryptocurrency mining.
Cryptocurrency Mining is a “Misuse of the Farm”
The government agency considers this a “misuse of the farm for purposes other than its intended use.” The prohibition is enforced with penalties for non-compliance, imposing fines of up to 10,000 UAE dirhams for those caught mining cryptocurrencies on farms.Cryptocurrency mining involves using computational power to solve complex mathematical puzzles and validate transactions on blockchain networks. Successful miners are rewarded with newly minted cryptocurrency, making mining a lucrative endeavor for many. The energy-intensive process likely influenced the decision to restrict such activities on agricultural land to preserve its intended use.
#UAE authority warns of Dh10,000 fine for #crypto mining on farms.
The process involves the use of highly sophisticated computers that consume a great deal of energy. https://t.co/3KQhfNhRTV
— Khaleej Times (@khaleejtimes) May 23, 2024
Despite this specific prohibition, the UAE has established itself as a supportive jurisdiction for Bitcoin mining. In 2023, data indicated that the UAE accounted for around 400 megawatts of Bitcoin mining capacity, representing 4% of the global hash rate. This makes the UAE one of the leading Bitcoin mining hubs in the Middle East, demonstrating a favorable environment for crypto activities outside of agricultural contexts.
While the UAE maintains a generally positive stance towards cryptocurrency, other countries have adopted stricter regulations. For instance, Kuwait banned all cryptocurrency-related operations, including mining, as of July 18, 2023.
UAE Still A Crypto-Friendly Country
According to a Dubai Multi Commodities Centre (DMCC) report, the UAE recorded $25 billion in crypto transactions in 2022 and is now pursuing further investment by adopting accommodative regulatory policies. Komodo CTO Kadan Stadlemann also recently praised the United Arab Emirates (UAE) for its political stability and monarchy, which he believes create a more favorable environment for crypto businesses than US regulatory challenges.The Middle East is experiencing a surge in crypto adoption, with the average daily number of traders surpassing 500,000 in February 2024, a 51% increase from the previous year. The UAE leads the region in adoption per capita, with peak daily active users reaching 106,111 in 2024. Despite its larger population, Saudi Arabia has slightly higher peak daily active users.The growth in adoption is attributed to evolving views on how crypto aligns with Islamic beliefs, with attitudes changing as cryptocurrencies become more regulated.Bitget Research forecasts that the number of daily active crypto users in the Middle East will continue to rise, reaching 700,000 by the end of 2024. The UAE is expected to become a central hub for cryptocurrency talent, capital, and enterprises, increasing its global crypto influence.
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