Gulf Forges Ahead on Digital Finance

Gulf countries are entering a new phase of monetary transformation, with digital currency markets witnessing an unprecedented boom.

These nations have already made significant strides, positioning digital currencies as part of a broader Gulf project to reengineer their economic structures within long-term visions of diversification and digital transformation.

As part of this project, the United Arab Emirates was the first to regulate the digital assets market, launching the region’s most advanced system – turning Dubai into a global hub for digital enterprises.

In Bahrain, the central bank introduced a comprehensive regulatory framework that attracted major firms such as Binance, making it the first globally licensed crypto platform in the Gulf. (Binance founder Changpeng Zhao was pardoned last month by U.S. President Donald Trump after serving four months in prison for violating U.S. banking regulations.)

Meanwhile, Saudi Arabia is moving cautiously through pilot projects like Project “Aber”, a joint initiative with the UAE to develop a central bank digital currency (CBDC) for cross-border payments.

Qatar and Oman are building frameworks to regulate virtual assets in line with stringent standards to counter money- laundering and financing terrorism.

According to financial markets expert Amr Zakaria Abdo, “While Western financial centers faced regulatory uncertainty, Gulf states took decisive action to establish clear frameworks for digital assets.”

Still, the Gulf’s efforts to fulfill its digital ambitions are not without challenges. There are obstacles that must be overcome before these countries can become true global hubs for digital finance.

Regulating the Market

Over the past years, Gulf Cooperation Council (GCC) countries have adopted a policy of “calculated openness” toward digital currencies; being aware that unrestrained financial innovation could threaten monetary stability – particularly in economies tied to strict monetary policies and strong central banks.

Under this cautious approach, the number of fintech hubs in the GCC grew from just one in 2018 to nine by 2024, and then to over 1,500 active fintech firms across the MENA region in 2025.

Abdo notes that “Gulf capitals positioned themselves as global leaders in blockchain and cryptocurrency innovation through early, comprehensive regulation and ecosystem development.”

He adds that this proactive strategy created powerful network effects, attracting international fintech companies and investment capital.

Yet, not all GCC countries are moving at the same pace. Some continue to chart their own path outside the regional mainstream.

Economic analyst Salah Al-Jimaz told MBN that “there’s a clear divergence among Gulf states in how they approach cryptocurrencies – legally, economically, and in avoiding money-laundering risks – while seeking to use them as a new source of national income.”

Al-Jimaz points out that Kuwait, for instance, remains distinct from Dubai, Bahrain, and Riyadh because it still bans cryptocurrency trading. Qatar has yet to take a clear position, while Oman maintains a balanced approach espousing openness and caution.

The “Digital Future” Gamble

Gulf countries view digital currencies and virtual assets as a non-oil growth frontier – a new engine for diversification that balances financial innovation with regulatory control.

The UAE and Saudi Arabia lead regional efforts to build an integrated digital financial ecosystem, followed by Bahrain, Qatar, and Oman, each progressing at different speeds.

“Sovereign wealth funds provided the liquidity backbone, while clear licensing pathways and institutional backing reduced friction for international firms establishing regional headquarters,” explains Abdo.

He believes the GCC’s early investments in regulatory clarity and ecosystem development have cemented its place as one of the world’s key hubs for digital and tokenized assets.

Recent figures underscore this trajectory:

• In Dubai, the total value of licensed virtual asset transactions exceeded 2.5 trillion dirhams (≈ $680 billion) since early 2025, according to the Virtual Assets Regulatory Authority (VARA).
• A report by Mining Grid shows that crypto investment flows into the UAE reached $34 billion between July 2023 and June 2024.
• In Saudi Arabia, the digital asset market was valued at $23 billion in 2024 and is expected to surpass $45 billion by 2033, according to IMARC Group.
• Bahrain’s crypto market reached $1.3 billion in 2024 (Ken Research).
• In Kuwait, digital revenues are projected to hit $58.1 million by 2025.
• Oman’s digital market is estimated at $35 million in 2025, expected to grow to $38 million by 2026.
• Qatar’s fintech sector – including digital assets – hit $453 million in 2024, with forecasts of over $2 billion by 2033.

Despite these promising numbers, Al-Jimaz stresses that the GCC’s financial infrastructure for hosting next-generation fintech is still evolving and will need deeper integration with global platforms.

He concludes that “cryptocurrencies could represent a genuine opportunity to enhance economic diversification and open wider revenue horizons beyond oil.”