The Abu Dhabi Agriculture and Food Safety Authority, the leading authority on agriculture in Abu Dhabi, United Arab Emirates (UAE), has issued a new advisory to farmers regarding the prohibition of crypto mining on farms. The government agency has stated that farms should not be used for mining cryptocurrencies as it goes against their intended use.
Any farmers found violating this rule will face penalties of up to 10,000 UAE dirhams, equivalent to approximately $2,722. The authority is taking a firm stance on this matter to ensure that farms are used solely for agricultural purposes.
Crypto mining is a popular method for users to earn cryptocurrencies by validating transactions on blockchain networks. Miners are rewarded with newly minted crypto for completing complex mathematical puzzles and securing the network.
Although crypto mining is not allowed on farms, the UAE has positioned itself as a pro-Bitcoin mining jurisdiction in the Middle East. In 2023, data revealed that the UAE had a combined Bitcoin mining capacity of around 400 megawatts, which constituted 4% of Bitcoin’s global hash rate.
While the UAE is known for its crypto-friendly approach, other countries in the Middle East, such as Kuwait, have taken a less welcoming stance towards digital assets. Kuwait recently banned all operations involving cryptocurrencies, including mining, confirming an “absolute prohibition” on crypto use cases.
Despite the differing positions of other countries, the UAE continues to be a hub for numerous crypto-focused projects. In May, blockchain analytics firm Chainalysis and institutional infrastructure provider Blockdaemon expanded their presence in the UAE. Chainalysis established its regional headquarters in Dubai, engaging with local government agencies and providing advice on regulatory development. Blockdaemon opened a new office in Abu Dhabi, with its expansion plans approved by the Abu Dhabi Global Market, one of the country’s financial regulators.
Crypto-native projects also view the UAE as a progressive environment for crypto. Sergey Nazarov, co-founder of Chainlink, praised the government, regulators, legal system, and economics of Dubai in a previous interview, highlighting their attractiveness to the crypto space.
Overall, while the Abu Dhabi Agriculture and Food Safety Authority prohibits crypto mining on farms, the UAE remains a favorable destination for crypto-related ventures, fostering innovation and attracting global players in the industry.