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UAE emerges as a bridge between digital assets and traditional finance
The UAE has an unusual combination of established banking infrastructure, specialist virtual asset regulation and access to capital and trade flows across the Middle East, Asia, Europe and Africa
- PUBLISHED: Sun 27 Sept 2026, 8:00 AM
With a unique mix of world-class banking infrastructure, forward-looking virtual asset regulations and unrivalled access to major trade and capital corridors, the UAE is rapidly becoming the beating heart of global finance. As traditional finance and digital assets increasingly converge, the country is positioning itself as the bridge that brings both worlds together.
Ahmed Ismail, Co-Founder, Daman Virtual, noted that the UAE enjoys a rare combination of established banking infrastructure, specialist virtual asset regulation and direct access to capital and trade flows across the Middle East, Asia, Europe and Africa, giving it a significant competitive edge.
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If the UAE continues on this trajectory, it could become the place where innovation and institutional finance meet in the middle, serving as a gateway for global capital. With momentum firmly on its side, the country is well-positioned to steal a march on competing financial centres and cement its reputation as a leading hub where the old and new worlds of finance come together under one roof. “The UAE is ticking all the right boxes. If it continues to weave these elements into a cohesive ecosystem, it can serve as a vital bridge between digital asset infrastructure and traditional financial markets,” Ismail told BTR.
UAE digital asset ecosystem
Ismail said the UAE's digital asset market has matured considerably, and everyone can now see that in the composition of activity.
Referring to Chainalysis data, he said the country received more than $56 billion in crypto value during the latest reporting period, with large institutional transactions growing by more than 50%. “That tells us institutional participation is becoming a meaningful part of the market rather than something we are simply anticipating,” he said.
“What is interesting now is how that activity is connecting with the wider financial system. We are seeing regulated stablecoins, tokenised assets and stronger links between virtual asset platforms and local banking infrastructure. For institutions, that changes the conversation because they can assess digital assets through familiar considerations: how funds move, how transactions settle, who the counterparties are and what governance and compliance standards apply.
“That is where I think the convergence between traditional and digital finance becomes real. It happens when the infrastructure starts solving financial problems institutions already have,” he said.
Ismail opined that the UAE has an unusual combination of established banking infrastructure, specialist virtual asset regulation and access to capital and trade flows across the Middle East, Asia, Europe and Africa.
“More importantly, we are starting to see those components connect. For institutions, that connectivity is what matters. Digital assets still need banking rails, liquidity, reliable settlement and regulatory oversight. If the UAE can continue bringing those elements together, it can play an important role in connecting digital asset infrastructure with established financial markets.”
In reply to a question about importance of regulatory clarity for attracting serious institutional capital into this market, he said it is fundamental, although institutions will always look beyond the licence itself.
“Every investment or counterparty decision may need to satisfy regulators, banks, auditors, boards and investment committees, so institutions need to understand how a platform is governed, how assets are protected, how transactions are monitored and how funds move through the banking system.
“That is why regulation ultimately has to translate into operational confidence. A well-defined regulatory framework gives institutions a starting point, while governance, documentation, transaction monitoring, banking connectivity and settlement determine whether they can actually participate at scale.”
The UAE has made considerable progress in bringing those pieces together. From an institutional perspective, that is much more meaningful than regulation in isolation.
Stablecoins, Tokenisation
Ismail notices that stablecoins are increasingly moving beyond crypto trading into payments, treasury and settlement across major markets and the UAE takes the lead in the Gulf region to develop required infrastructure in this regard.
He said settlement, treasury management and cross-border payments are the clearest use cases to me because they address very practical inefficiencies around banking hours, settlement times and moving liquidity between markets.
“We are already seeing that infrastructure develop locally. DDSC, the UAE's dirham-backed stablecoin, has received central bank approval to go live on selected VARA-regulated exchanges and is designed as a regulated dirham-denominated payment and settlement asset. That is important because it begins to connect blockchain-based settlement directly with the currency and regulatory framework institutions in the UAE already use.”
The real test will be whether stablecoins can deliver those efficiencies at scale while meeting the AML, governance and risk standards institutions require. If they can, their role in regional payments and treasury could become significant, he said.
Ismail agrees that tokenisation is attracting increasing attention in the UAE, particularly in sectors such as real estate and tokenised real-world assets are likely to become a meaningful institutional asset class, offering opportunities to investors.
“Real estate gives us a useful example of what that could look like. Dubai's real-estate tokenisation project has already progressed into a second phase that includes controlled secondary-market activity. The first tokenised property attracted 224 investors from 44 nationalities, with 70% entering Dubai's property market for the first time.
“That demonstrates one of tokenisation's clearest benefits: changing how investors access and transact in traditionally illiquid assets. Dubai Land Department has projected that tokenised real estate could account for Dh60 billion in transactions by 2033, so there is clearly an ambition to take this beyond experimentation.”
He said the same principle can extend to private markets, funds and fixed income. For institutions, however, scale will depend on liquidity, governance, legal ownership and the ability to transact within established regulatory frameworks. The technology alone doesn't create an institutional market.
Digital Ecosystem barriers
Ismail also highlighted some of the biggest barriers currently preventing traditional financial institutions and corporates from adopting digital assets at greater scale — regulation, infrastructure, liquidity, risk management, cybersecurity or simply confidence.
“I would put operational certainty high on the list. Institutions already know how to assess market risk. The harder questions are often around counterparties, settlement, banking connectivity, custody, compliance and what happens operationally once capital enters or leaves a digital asset market.”
That means an institution needs to know who sits on the other side of a transaction, how funds will move between fiat and digital assets, how assets are held, how transactions are monitored and whether there is a complete audit trail.
“These may sound like operational details, but they determine whether an institution can participate within its existing governance framework. As digital asset markets become more institutional, I think that is where competition between platforms will increasingly take place.”
Daman Virtual Priorities
About Daman Virtual, Ismail said it is regulated by Dubai’s Virtual Assets Regulatory Authority. He also shed light on how does operating within a regulated framework change the proposition for institutional clients compared with accessing digital assets through offshore or less-regulated channels.
“For an institutional client, Daman Virtual starts with knowing exactly who the counterparty is, which regulator oversees that business and how funds will move.
“Our VARA licence provides that regulatory foundation, while our UAE banking connectivity and AED settlement allow clients to move between traditional banking and digital assets through local banking rails. Around that sit the controls institutions expect around compliance, transaction monitoring, execution, settlement and governance.
“Having spent more than two decades in institutional finance, I know these questions are rarely secondary. A bank, auditor, investment committee or board needs to be able to understand and evidence the relationship. That has shaped how we have built Daman Virtual from the outset.”
About the Daman Virtual’s priorities as the company enters next phase of growth, he said: “Our focus is on deepening the infrastructure institutional clients actually need: AED settlement, UAE banking connectivity, access to liquidity, strong compliance and dedicated relationship management.”
“We see opportunities across the GCC and key Asian corridors as more institutions explore digital assets, particularly where there is a need to move value efficiently between markets. The UAE will remain our base, and our role is to make that connection between traditional banking and digital assets work in practice.”
About the digital assets future trends, he said: “I think digital asset infrastructure will increasingly become part of mainstream finance, and some of what is happening today already points in that direction. We have a regulated dirham-backed stablecoin moving towards exchange availability, Dubai is testing secondary-market trading of tokenised real estate, and institutional transaction activity has continued to grow.”
“Over the next three to five years, I expect the technology itself to become less interesting than what it enables. If tokenisation makes an asset easier to issue and transfer, or blockchain-based settlement allows capital to move more efficiently, institutions will assess those capabilities in much the same way they assess any financial infrastructure.”
“The test will remain practical: does it solve a real financial problem, and can it do so within the governance, compliance and risk standards institutions require? Where the answer is yes, adoption will follow,” Ismail concluded.
