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UAE Agriculture Authority bans cryptocurrency mining on farms

The decision aims to protect agricultural and energy resources, preventing potential disruptions to agricultural production and water management in the region.

Date: 2024-05-27 Author: Marek Stiller
UAE Agriculture Authority bans cryptocurrency mining on farms

Abu Dhabi’sAgriculture and Food Safety Authority issued a new recommendation on Thursday prohibiting the use of farms to mine cryptocurrencies. Farmers caught engaging in such activities face a fine of up to 10,000 UAE dirhams (about $2,722).

In its advisory, the Abu Dhabi Agriculture and Food Safety Authority made it clear that farms cannot be reused for cryptocurrency mining.

The government agency considers it “an improper use of the farm for purposes other than its intended use.” The ban is enforced with penalties for noncompliance, imposing fines of up to 10,000 UAE dirhams on 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 cryptocurrency, making mining a lucrative venture for many. The energy-intensive process likely influenced the decision to limit such activity on agricultural land in order to preserve its use.

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Despite this particular ban, the United Arab Emirates has become a Bitcoin mining-supporting jurisdiction. In 2023, data indicated that the UAE had about 400 megawatts of Bitcoin mining capacity, representing 4% of the global hashing rate. This makes the UAE one of the leading Bitcoin mining centers in the Middle East, demonstrating a favorable environment for crypto activity outside of an agricultural context.

While the UAE maintains a generally positive stance toward cryptocurrencies, other countries have adopted stricter regulations. For example, Kuwait has banned all cryptocurrency operations, including mining, as of July 18, 2023.

The United Arab Emirates continues to be a cryptocurrency-friendly country

According to a report by the Dubai Multi Commodities Centre (DMCC), the UAE recorded $25 billion worth of cryptocurrency transactions in 2022 and is now pursuing further investment by adopting accommodative regulatory policies.

Komodo’s CTO, Kadan Stadlemann, recently praised the United Arab Emirates (UAE) for its political stability and monarchy, which he believes creates a more favorable environment for crypto companies than regulatory challenges in the US.

The Middle East is experiencing a surge in the popularity of cryptocurrencies, with the average daily number of traders surpassing 500,000 in February 2024, up 51% from the previous year. The United Arab Emirates leads the region in terms of 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 increase in adoption is attributed to evolving views on the compatibility of cryptocurrencies with Islamic beliefs, with attitudes changing as regulation of cryptocurrencies increases.

Bitget Research forecasts that the number of active cryptocurrency users 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 the global number of cryptocurrency influencers.

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Marek Stiller
Marek Stiller
Founder of the "Cryptocurrency for Beginners" channel on YouTube. He collaborates with Łukasz to form the Arena Trading group, while at the same time being passionate about blockchain technology. His knowledge and experience in the cryptocurrency industry help beginner investors better understand this dynamic market.
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