Crypto Regulation in the Middle East – What’s Changing in 2025?

Author: Jaffar Hashmi – Fintech Analyst & Digital Asset Researcher

The Middle East has always been a region of financial power and in 2025 it’s leading the way in global crypto regulation. With rapid innovation in blockchain and growing popularity of digital assets, countries across the region are updating laws, opening up to institutional investors and preparing for a tokenized future. Here’s what’s changing in the Middle East crypto landscape this year.

Regional Overview: From Hesitation to Embrace

For years crypto regulation in the Middle East was a mixed bag some countries welcomed digital assets, others were cautious or banned them. In 2025 the narrative has changed. Governments are no longer asking “if” but “how” to regulate and integrate crypto.

UAE: The Region’s Innovation Hub

The United Arab Emirates, especially Dubai and Abu Dhabi, are at the heart of the region’s crypto growth:

What’s New in 2025:

  • VARA (Virtual Assets Regulatory Authority) introduced stricter compliance standards for centralized exchanges and DeFi protocols.
  • Tokenized real estate is now officially regulated, allowing fractional property investment using blockchain.
  • Zero tax on crypto capital gains remains a major draw for global investors and startups.

Dubai’s Digital Economy Strategy aims for blockchain to account for 15% of GDP by 2028.

Saudi Arabia: Shifting Gears Toward Adoption

Saudi Arabia, once conservative in its crypto stance, is now opening doors with a more proactive approach:

What’s Changing:

  • The Saudi Central Bank (SAMA) is piloting CBDCs and sandboxing licensed crypto exchanges.
  • Crypto is being integrated into Vision 2030, especially within smart city projects like NEOM.
  • Regulatory framework for tokenized sukuk and Islamic finance-compliant crypto is in development.

Bahrain & Qatar: Competing for Fintech Supremacy

Bahrain:

  • The Central Bank of Bahrain (CBB) continues supporting licensed crypto exchanges.
  • Bahrain is pushing fintech-friendly policies, encouraging regional stablecoin development.

Qatar:

  • The Qatar Financial Centre (QFC) is developing its first crypto asset licensing framework in 2025.
  • Focus is on institutional adoption and regulatory clarity for security tokens.

🇰🇼 🇴🇲 Other Countries

  • Kuwait reaffirmed a ban on crypto trading for retail users, but institutional pilots are under review.
  • Oman is moving forward with blockchain integration in government services, and launching its own digital rial (CBDC) pilot in late 2025.

Why the Shift Toward Regulation?

Key Drivers:

  • Pressure from global regulators (FATF, IMF, G20) to standardize crypto AML laws.
  • Rising interest in tokenized oil trading, CBDCs, and cross-border payments.
  • The desire to attract Web3 startups and talent in a post-oil economic era.

Regulatory Focus in 2025

Regulatory Theme

Middle East Trend

AML/KYC Compliance

Mandatory for all exchanges and wallet providers

Stablecoins

Frameworks under development in UAE, Bahrain

Tokenized Assets

Real estate, sukuk, and carbon credits being explored

CBDCs

Pilots active in UAE, Saudi Arabia, Oman

Taxation

No capital gains tax in UAE and Bahrain; under review elsewhere

What to Expect Next?

  1. Regional Crypto Licensing Framework – GCC countries may unify standards to ease cross-border operations.
  2. Increased Tokenization – Especially in real estate, energy, and logistics.
  3. Islamic Crypto Products – Sharia-compliant DeFi and digital assets to enter mainstream discussion.
  4. AI + Blockchain Policies – Regulatory focus expanding beyond just crypto to Web3, AI, and digital ID.

Conclusion.

The Middle East in 2025 is no longer simply experimenting with crypto it’s building a regulated future around it. With progressive frameworks, global partnerships, and a clear digital economy vision, the region is setting the tone for responsible innovation.

For investors, builders, and policymakers this is the time to pay close attention.

Disclaimer: This article reflects the author's opinion and is for informational purposes only. It does not constitute financial advice.


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