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Abu Dhabi Prohibits Cryptocurrency Mining Operations on Farms

Last Updated on June 5, 2024 by Hamza Khan

The UAE’s Abu Dhabi Agriculture and Food Safety Authority (ADAFSA) recently released a new advisory prohibiting using farms for cryptocurrency mining. Here is what the authorities recently announced about crypto mining in Abu Dhabi

What Is Crypto Mining?

Crypto mining is known as the process of verifying transactions and creating new crypto assets like Bitcoin. It is known for its high electricity consumption because of the very powerful computers it requires. According to reports, ADAFSA’s decision comes amid concerns that the energy-intensive process of mining cryptocurrency causes unsustainable increases in electricity bills, potentially jeopardizing agricultural operations.

What Are The Regulations And Restrictions On Crypto Mining In Abu Dhabi? 

The advisory expressly states that farms cannot be repurposed for cryptocurrency mining, which authorities regard as “misuse of the farm for purposes other than its intended use.” Farmers caught engaging in such activities could face fines of up to $2,722 (10,000 UAE dirhams). 

Despite this specific prohibition, the UAE has always been seen as a favorable jurisdiction for Bitcoin mining. In 2023, data showed that the UAE had approximately 400 megawatts of Bitcoin mining capacity, accounting for 4% of the global hash rate.

FAQs

Is mining allowed in the UAE?

The UAE has taken the first step against the digital currency mining business by outlawing mining operations on farms nearly two years after the country initially became known as a safe haven for miners.

What is crypto mining farming?

The farmers—also referred to as miners—work on what we call a farm in order to harvest digital currency. The foundation of the Bitcoin network is the farmers who process these coins. Without farmers, the network would eventually disintegrate and lose all value; this makes them critical components. 

Is crypto Mining haram?

Because cryptocurrency mining involves creating money out of nothing, some Muslims contend that it is forbidden under Shariah law.

Are crypto mining farms illegal?

Mining Bitcoin is legal in a lot of places. Before you begin mining, it’s crucial to find out the legality of the practice in your country because there are still some countries where such practices are illegal.

Is binance halal or haram?

Crypto, in general, is halal to buy, sell, or hold as an asset, but only spot trading is halal on Binance (or any other exchange). So, margin trading, futures, staking, defi staking, earn services, loans, dual investments, and borrowing are ALL Haram, and Binance, in particular, rewards normal staking.

Is there a Bitcoin ATM in the UAE?

Dubai is among those with Bitcoin ATMs since it has welcomed cryptocurrency with open arms. The first Bitcoin ATM was installed in Dubai in 2019 and is located at the upscale Rixos Premium, a Dubai Hotel.

Does the UAE allow Bitcoin?

Dubai permits bitcoin trading despite its reputation as a conservative region. Moreover, profitable investors keep a more significant portion of their profits because there is no personal income tax or capital gains tax to pay. However, they have recently banned crypto mining in Abu Dhabi.

Takeaways

Undoubtedly, the UAE remains a favorable jurisdiction for Bitcoin-related activities. This move demonstrates how the UAE is encouraging technology improvements in a balanced way while protecting vital industries like agriculture.

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