In 2025, fintech in the United Arab Emirates (UAE) continued to grow and evolve, driven by new regulatory developments, widespread adoption of advanced technologies such as artificial intelligence (AI), and increased use of tokenization and blockchain to improve efficiency and broaden access of financial services.
The Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM) further strengthened their roles as leading fintech hubs, while consumers and businesses increasingly embraced digital assets and tokenized solutions. Islamic fintech also advanced, leveraging the UAE’s well-established Islamic finance sector and a national strategy to promote Islamic finance and the halal economy.
Despite these gains, businesses continued to face challenges, grappling with complex licensing requirements, compliance obligations, and a fragmented regulatory landscape. At the same time, the UAE continued to face increased competition from other Gulf Cooperation Council (GCC) markets, which are also aggressively investing to expand their fintech sectors.
Free zones continue to serve as top fintech hubs
In 2025, UAE free zones of DIFC and ADGM remained major domestic fintech hubs.
DIFC now boasts over 1,500 fintech, artificial intelligence (AI), and innovation firms, forming the region’s largest cluster of its kind. The hub has propelled Dubai to become one the top fintech centers in the world. According to the Global Financial Centres Index 38, DIFC ranks as the ninth-largest fintech hub globally, surpassing Zurich, Stockholm, and Frankfurt, and securing its place as the top fintech hub in the Middle East.
At a smaller scale, ADGM in Abu Dhabi hosts over 300 financial firms, including fintech companies. This hub emphasizes regulatory support, compliance, and industry collaboration through initiatives such as the ADGM RegLab, a regulatory sandbox, and the ADGM Digital Lab, where fintech companies and industry stakeholders come together to co-create and test solutions under the guidance and supervision of the regulator.
ADGM is also home to Hub71, a tech community of over 370 startups, renowned corporations, and prominent investors. Fintech is one of the key sectors in Hub71’s ecosystem alongside healthtech, climatetech, edtech and others.
AI adoption surges
In 2025, AI emerged as a major theme in the UAE business community. Microsoft research shows that the UAE leads the world in AI adoption, with 59.4% of the country’s working-age population now utilizing the technology, surpassing Singapore (58.6%), Norway (45.3%), and Ireland (41.7%).
Although the UAE lacks world-renowned AI leaders and labs, strong infrastructure, policy coordination, and digital readiness have driven rapid AI uptake.
The UAE Strategy for AI 2031 was launched in 2017 to deploy AI across many sectors, including government services, transportation, and healthcare, to boost performance, create a new high-value market, and make the UAE the world leader in AI investment.
Most recently, the UAE launched the AI for Development initiative, committing US$1 billion to expand AI infrastructure and AI-enabled services across Africa, especially across areas including education, and climate adaptation.
Plans are also underway to build one of the world’s largest data center hubs in Abu Dhabi in partnership with US technology companies. The project, unveiled in May, will feature a 5-gigawatt capacity campus spanning 10 square miles.
Microsoft is among the biggest AI investors in the UAE, pledging US$15.2 billion between 2023 and 2029 to expand local data centers, advance AI technologies, and train one million people in the UAE by the end of 2027. This year, the firm established the Global Engineering Development Center and opened a new center for the Microsoft AI for Good Lab in Abu Dhabi.
Tokenization and stablecoins take center stage
Digital assets and tokenizations were other prominent themes in 2025, driven by growing adoption, evolving regulations, and government initiatives.
The UAE now ranks third in digital asset transaction volume in the Middle East and North Africa (MENA), with US$34 billion recorded in the year ending June 2024 and a 30% adoption rate, according to a 2025 report by PwC and Fuze.
The UAE also boasts one of the most active digital asset investor communities globally. A separate 2025 study conducted by PwC’s Strategy& practice revealed that 98% of UAE retail investors intend to increase digital asset holdings over the next 12 months, compared with 76% in Germany. Notably, 59% of UAE investors are targeting increases of at least 50%.
Additionally, 45% of UAE investors expressed interest in tokenized assets via banks or trading platforms, compared with 16% in Germany and 32% in the US, reflecting high interest in the emerging asset class. In comparison, only 16% of retail investors in Germany, and 32% in the US, showed interest in tokenized assets.
Adoption is accelerating alongside a rapidly evolving regulatory landscape. In May, Dubai’s Virtual Assets Regulatory Authority (VARA) updated its framework to explicitly cover the issuance and distribution of real-world assets (RWAs). The authority introduced Asset-Referenced Virtual Assets (ARVAs), a legal category that formally recognizes tokenized real-world assets as regulated financial instruments. These assets are backed by one or more underlying assets, and are designed to providing price stability or asset exposure.
At the federal level, the UAE welcomed its first stablecoins. In December 2024, AE Coin became the first fully licensed dirham-backed stablecoin in the UAE, and in February 2025, the Dubai Financial Services Authority (DFSA) recognized Circle’s USDC and EURC stablecoins under the DIFC’s crypto token regime.
Most recently, Abu Dhabi sovereign wealth fund ADQ, conglomerate IHC, and the UAE’s biggest lender by assets First Abu Dhabi Bank (FAB), unveiled plans to launch a new dirham-backed stablecoin.
This year, Dubai also launched the pilot phase of its Real Estate Tokenisation Project, establishing the Dubai Land Department as the first real estate registration entity in the Middle East to implement tokenization on property title deeds.
Islamic fintech gains momentum
Islamic finance gained strong momentum in 2025, with the UAE unveiling in May a comprehensive national strategy to advance Islamic finance and the halal economy. The plan aims to develop an integrated ecosystem for Islamic banking, Islamic insurance (takaful), Islamic bonds (sukuk), and other non-banking services, in alignment with international standards.
It has set out ambitious goals for the UAE, including increasing the assets of its Islamic banks from AED 986 billion (US$268 billion) to AED 2.56 trillion (US$697 billion) within six years and raise the value of listed Islamic sukuk to over AED 660 billion (US$180 billion) by 2031.
The UAE has one of the world’s largest and most developed Islamic financial markets. As of May 2025, sukuk listed on Nasdaq Dubai exceeded US$95.7 billion. In 2023, the country ranked fourth globally in Islamic financial markets by assets, according to the Islamic Finance Development Indicator based on total assets.
The UAE is also emerging as a leading fintech hub. The Global Islamic Fintech Report 2024/25 by the Islamic Financial Services Board (IFSB) ranks the UAE fourth globally, hosting over 10% of all Islamic fintech companies worldwide, making it the fourth-largest Islamic fintech market in the sector.
Fintech regulation advances
In addition to the introduction of the ARVAs category, 2025 saw several other fintech regulatory developments. In September, the Federal Decree-Law No. 6 of 2025 was issued, creating a new unified banking, fintech and insurance regulatory law replacing earlier separate laws.
The law strengthens the Central Bank of the UAE’s authority, enhances consumer protection, and promotes financial innovation. It also requires licensed institutions to provide access to banking and financial services for all, supporting digital transformation and inclusion.
In June, the updated Exchange and Remittance Business Regulations came into effect, introducing four license categories for currency exchange and remittance payment services, including a 100% foreign-owned digital remittance license. The regulations also implement enhanced governance, internal control, and risk management obligations aligned with global anti-money laundering (AML) and countering the financing of terrorism (CFT) standards.
In May, the Securities and Commodities Authority (SCA) introduced a new resolution regulating natural persons who provide financial recommendations via social media and public platforms, or so-called “finfluencers”. The regulation applies to those with significant audience reach, affecting crypto and fintech promotion. These individuals must register with the SCA, meet “fit and proper” criteria, and comply with content and ethical standards.
Regulatory complexity and heightened regional competition
Despite supportive regulation, fintech companies in the UAE continue to face significant challenges. Startups, in particular, often underestimate regulatory requirements early in development, resulting in obstacles related to licensing and compliance readiness.
Businesses also encounter varied licensing regimes across emirates and free zones, and some may need to secure multiple licenses, increasing compliance costs and administration burden. Furthermore, stablecoin and digital asset oversight remains highly fragmented, adding further complexity.
In addition, rapidly evolving regulations in fintech, AI, and cloud services require constant monitoring of developments, and continuous legal and operational adaptation.
Finally, the UAE faces rising regional competition within the GCC. Markets including Saudi Arabia and Qatar are aggressively investing in fintech expansion, introducing incentives to attract global talent and intensifying the battle for market leadership in the region.
Featured image credit: Edited by Fintech News Middle East, based on image by videoflow via Freepik
