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The United Arab Emirates (UAE) has established itself as a key player in the Bitcoin market. It currently owns about 6,300 BTC, worth roughly $700 million. According to blockchain analytics firm Arkham Intelligence, these holdings make the UAE the fourth-largest government Bitcoin holder.
The UAE's unique method of obtaining Bitcoins via mining instead of asset seizure distinguishes it from other countries with large crypto reserves, including the US and the UK.
The UAE acquires its Bitcoin through Citadel Mining, which is a company majority owned by the International Holding Company (IHC). According to the report by Arkham Intelligence, in 2022, Citadel Mining built one of the largest Bitcoin mining complexes in Abu Dhabi together with Phoenix Group. Through the mining process, the country has been able to stock considerable Bitcoin holdings since last year.
Overall, Citadel Mining has reportedly mined 9,300 BTC. The government controlled this mining, and at least 6,300 BTC are now under its control. This distinguishes the use of mining as an approach from the rest of the holdings owned by most sovereign nations, which came through asset seizures.
Countries such as the United States and the United Kingdom have obtained Bitcoin mainly through criminal cases. However, the UAE has opted to invest in the long-term accumulation of digital assets via mining.
The approach to Bitcoin mining demonstrates the UAE's persistence in developing its digital economy. In addition, the UAE aims to leverage cryptocurrency mining to achieve a future-proof store of value and align with the global trends of digital finance.
This is similar to what other countries, such as Bhutan, have done by turning to Bitcoin mining instead of direct purchase or confiscation. In contrast to its Western peers, the UAE strategy will focus on the inclusion of Bitcoin in the overall economy, taking advantage of its energy availability and increasing decentralized wealth.
This move into the crypto space is also in line with the UAE's regulatory policies, which are quite pro-crypto. There have been efforts to foster a favorable environment for blockchain innovation, especially within the Dubai region, which hosts several blockchain startups and crypto companies.
As the UAE further establishes itself as a regional leader in fintech innovation, its Bitcoin mining activities are a building block of its increasingly significant role within the international digital economy.
Furthermore, the acquisition of Bitcoin allows the UAE to join a growing number of countries with Bitcoin in their reserves. Currently, approximately 2.4% of the total Bitcoin supply is owned by sovereign entities, which is estimated to be more than $56 billion.
With additional governments adopting the UAE, Bitcoin may only be seen as an additional asset on reserve lists, potentially transforming traditional economic systems.
