The UAE recently opened the largest nuclear power plant in the Arab world, with a total capacity of 4 gigawatts, and is preparing to expand later this year.
The UAE is establishing itself as a major destination for Bitcoin (BTC) mining in the Middle East. With its pro-Web3 ecosystem, abundant energy resources, tax benefits, and business-friendly environment, the country presents an attractive option for miners looking for growth and profitability.
On Twitter at length string On July 5, Jaran Melrod, Luxor-based Business Development Associate and crypto mining expert, provided an insight into the latest developments in the mining sector in the UAE. According to him, the partnership between Zero Two, a blockchain infrastructure provider and a subsidiary of the Abu Dhabi sovereign wealth fund, and the US-based mining company Marathon Digital in May 2023 started the country’s journey into the global mining scheme.
The two companies have entered into a partnership to launch two mining sites in Abu Dhabi. Equipped with a combined capacity of 250 MW, these facilities will be supplied with excess power from Abu Dhabi networks, ensuring sustainability and efficiency. Earlier in 2021, Zero Two partnered with local mining company Phoenix Technology to bolster its presence in the country.
The combined mining capacity in the UAE is estimated to reach 400 megawatts
As an important player in the energy market, the UAE has proactively shifted its focus from traditional fossil fuels to renewable energy sources. Solar and nuclear energy have emerged as the main pillars in the country’s energy transition. The surplus energy generated from these sustainable sources provides an opportunity for bitcoin miners to benefit from clean energy and contribute to the country’s green initiatives.
The West Asian country recently inaugurated the largest nuclear power plant in the Arab world, with a total capacity of 4 gigawatts, and is preparing to expand later this year. The expansion aims to increase the flow of nuclear energy demand for flexibility.
Mellerud revealed in tweets that the bitcoin mining capacity in the UAE is estimated to be around 400 megawatts, which is about 4% of the global hash rate. While the hash rate leaderboards are dominated by countries like the United States, China, Russia, and Kazakhstan, the UAE’s abundant resources and favorable environment positions it as a rising competitor in the global mining scene.
He also indicated that the country’s mining capacity could exceed 600 megawatts by the end of this year with the expansion of semi-government projects.
Tax advantages and the regulatory environment
Mellerud said that one of the significant advantages of bitcoin miners in the UAE is the country’s zero tax policy and lack of regulation regarding mining activities. Miners can register their operations in one of the more than 30 free trade zones in the UAE, enabling them to avoid corporate tax, Value Added Tax (VAT) and import duties.
This tax haven status provides miners with a competitive advantage in the global mining industry, allowing them to improve their financial position and boost profitability.
Apart from a 0% tax on bitcoin mining activities, the country does not charge any taxes on cryptocurrency earnings, unlike other countries like India, which has imposed a 30% tax on all digital asset profits.
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Chimamanda is a cryptocurrency enthusiast and seasoned writer focusing on the dynamic world of cryptocurrency. She joined the industry in 2019 and has since developed an interest in the emerging economy. She combines her passion for blockchain technology with her love of travel and food, bringing a fresh and engaging perspective to her work.