UAE Agriculture Authority bans cryptocurrency mining on farms

Last updated: May 24, 2024 4:47 pm EDT | 2 minute read

The United Arab Emirates’ Abu Dhabi Agriculture and Food Safety Authority issued a new notice on Thursday banning the use of farms for cryptocurrency mining. Farmers caught carrying out such activities risk fines of up to 10,000 UAE dirhams (about $2,722).

The Abu Dhabi Agriculture and Food Safety Authority consultative explicitly stated that farms cannot be repurposed for cryptocurrency mining.

Cryptocurrency Mining Is “Farm Misuse”

The government agency considers this an “improper use of the farm for purposes other than its intended purpose.” The ban 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 computing power to solve complex mathematical puzzles and validate transactions on blockchain networks. Successful miners are rewarded with newly minted cryptocurrencies, making mining a profitable activity for many. The energy-intensive process likely influenced the decision to limit such activities on agricultural land to preserve its intended use.

Despite this specific ban, the UAE has established itself as a supporting jurisdiction Bitcoin mining. In 2023, data indicated that the UAE accounted for approx 400 megawatts of Bitcoin mining capacity, which represents 4% of the global hash rate. This makes the UAE one of the major Bitcoin mining hubs in the Middle East, proving a favorable environment for crypto assets outside of agricultural settings.

While the UAE maintains a generally positive stance towards cryptocurrency, other countries have adopted stricter regulations. For example, Kuwait has banned all cryptocurrency-related operationsincluding mining, starting from 18 July 2023.

The UAE is still a cryptocurrency-friendly country

According to a report by the Dubai Multi Commodities Center (DMCC), the The UAE recorded $25 billion in crypto transactions in 2022 and is now pursuing further investments while adopting accommodative regulatory policies.

Komodo CTO Kadan Stadlemann also recently praised the United Arab Emirates (UAE) for their political stability and monarchywhich he believes creates a more favorable environment for cryptocurrencies than US regulatory challenges.

THE The Middle East is experiencing a surge in cryptocurrency adoption, with the average daily number of traders surpassing 500,000 in February 2024, an increase of 51% from the previous year. The UAE leads the region in per capita adoption, with peak daily active users reaching 106,111 in 2024. Despite its larger population, Saudi Arabia has a slightly higher peak daily active users.

The growth in adoption is attributed to evolving views on how cryptocurrencies align with Islamic beliefs, with attitudes changing as cryptocurrencies become more regulated.

Bitget Research predicts that the number of crypto users active daily in the Middle East will continue to grow, reaching 700,000 by the end of 2024. The UAE is expected to become a central hub for cryptocurrency talent, capital and businesses, increasing its global influence in the cryptocurrency industry.

Fuente