A third of UAE residents have invested in cryptocurrencies, survey finds

People in the Emirates plan to allocate 26% of their investable assets to digital tokens

Eighteen per cent of UAE residents said they trust cryptocurrencies, a survey has found. Reuters

One month after Dubai adopted new laws governing virtual assets, 33 per cent of UAE residents say they have invested in cryptocurrencies, a survey has shown.

This compares with 30 per cent of people who have invested in the asset class globally.

Residents in the UAE plan to allocate 26 per cent of their investable assets to cryptocurrency, compared with 20 per cent globally, findings in the survey by online market research company Toluna show.

Researchers polled 500 people in the Emirates and 9,000 globally between the ages of 18 and 64 for the study.

Meanwhile, 18 per cent of UAE residents said they trust cryptocurrencies, the survey found.

“Despite the relatively cautious attitude towards investing in cryptocurrencies, the overall outlook in the UAE shows investors tend to embrace the global trend towards this type of investment,” said Sakina Mannan, Toluna's senior account director for the Middle East and Africa region.

“As per the study indications and the strategic business outlook in the country, it’s likely that we’ll be seeing growing interest towards cryptocurrencies in the UAE.”

In March, Dubai outlined clear regulations to govern emerging technology sectors such as cryptocurrencies in an effort to safeguard investors.

The Virtual Asset Regulatory Authority (Vara) serves as the single custodial entity mandated to licence and govern the cryptocurrency sector in Dubai, including all mainland and free zones, excluding the DIFC.

Following the announcement, Binance, the world’s largest cryptocurrency exchange, and FTX Europe secured virtual asset licences to operate in Dubai. Cryptocurrency exchange Bybit has also received approval to conduct a virtual assets business in Dubai and plans to set up its global headquarters in the emirate, the company said.

Singapore-based cryptocurrency exchange crypto.com will establish its regional hub in Dubai, while BitOasis, one of the earliest cryptocurrency exchanges to set up in the UAE, said it has applied for a new licence with Vara. It received provisional approval to operate in the emirate.

Fifty-five per cent of investors in the UAE are aware of cryptocurrencies compared with 61 per cent globally, while 17 per cent said digital coins are a low-risk investment compared with 33 per cent of survey respondents globally, the Toluna research showed.

However, people who do not invest in cryptocurrency in the UAE view digital tokens as “risky and volatile”, the survey found.

About 43 per cent of those polled in the Emirates cited a fear of associated risk as the main reason for hesitating to invest in cryptocurrencies, while 38 per cent pointed to a lack of understanding, Toluna said.

Meanwhile, 50 per cent of those polled in the UAE said cryptocurrencies were on an upwards trend compared with 45 per cent globally. About 11 per cent said the cryptocurrency sector was only hype, compared with 17 per cent globally.

Additionally, 36 per cent of UAE residents said cryptocurrencies were a “continuing project without any guarantee of success”, while 45 per cent globally expressed this opinion.

About 46 per cent of respondents in the Emirates said short-term investments were the main driver for cryptocurrency investment, the survey found.