UAE Imposes Strict Ban on Crypto Mining on Agricultural Lands

Abu Dhabi’s agricultural authority has issued a definitive prohibition on cryptocurrency mining activities on farms, implementing fines up to 10,000 dirhams (approximately $2,722) for violators. This move underscores the government’s commitment to preserving the integrity of agricultural land and its intended use, while maintaining a generally supportive stance towards the cryptocurrency sector.

The Abu Dhabi Agriculture and Food Safety Authority (Adafsa) announced this prohibition, highlighting the energy-intensive nature of crypto mining. Cryptocurrency mining, which involves validating transactions and creating new coins on blockchain networks, requires substantial computational power and electricity. The advisory from Adafsa stressed that using farms for such activities constitutes a misuse of agricultural resources.

The directive from Adafsa is aimed at preventing a significant spike in electricity consumption on farms, which could undermine agricultural productivity and sustainability. By banning crypto mining on farms, the authority seeks to ensure that agricultural lands are utilized strictly for their designated purposes—farming and food production.

Farming, which relies heavily on controlled use of resources like water and electricity, could be severely impacted by the high energy demands of cryptocurrency mining. The advisory underscores that this regulation is not merely about resource allocation but about maintaining the core function of agricultural land.

Despite the prohibition on crypto mining in the agricultural sector, the UAE continues to position itself as a favorable jurisdiction for cryptocurrency and blockchain activities. In 2023, the UAE’s combined Bitcoin mining capacity was estimated at around 400 megawatts, accounting for approximately 4% of the global Bitcoin hash rate. This positions the UAE as a significant player in the Middle Eastern crypto landscape.

The country’s broader regulatory framework for cryptocurrencies is designed to balance innovation with compliance. For instance, in 2023, the UAE introduced a crypto business licensing program aimed at providing regulatory clarity. However, this program is not mandatory for Dubai or the UAE’s economic free zones, reflecting a nuanced approach that fosters both regulatory compliance and business flexibility.

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