Abu Dhabi the New Hong Kong?
Inside the region's bold play for digital finance supremacy
The $1.5 Trillion Question
Abu Dhabi controls $1.7 trillion in sovereign wealth—more than the GDP of Spain. The emirate is betting this capital, combined with regulatory innovation and geographic advantage, can transform it into the world’s next great financial gateway.
After attending Abu Dhabi Finance Week (ADFW) last week, I’m finding the strategy even clearer: Abu Dhabi is actively designing the future of finance.
ADFW is the MENA region’s premier financial event, organised by Abu Dhabi Global Market (ADGM), Abu Dhabi’s international financial centre and regulator. This gathering brings together global leaders, policymakers, investors, and innovators to explore the future of finance, with institutions managing trillions in assets discussing everything from AI to digital assets to sustainability.
This year, the conference brought together former Barclays CEO Bob Diamond, Ray Dalio, crypto pioneers, institutions managing trillions, and regulators for closed-door stablecoin sessions. The geographic diversity exceeded typical Western conferences—perspectives flowed from Asia, Africa, and the Middle East.
Understanding the Emirates Experiment
The United Arab Emirates (UAE) operate as a federation where power is distributed among seven emirates and their ruling families. Dubai captures global attention with its skyline and merchant mentality. But it’s Abu Dhabi which holds 94% of the UAE’s oil reserves and serves as the federation’s political capital.
This dynamic creates productive tension. Dubai pushes boundaries with debt-fueled mega-projects. By contrast, Abu Dhabi deploys patient, strategic investments backed by sovereign wealth. Here’s a parallel that’s often made: “Dubai is the flashier sibling who gets all the attention at parties. Abu Dhabi owns the house.”
The rivalry drives excellence. When Dubai launched VARA (its crypto regulator), Abu Dhabi refined ADGM’s framework. When Abu Dhabi attracts a major financial institution, Dubai counters with new incentives.
The Hong Kong Parallel
The energy in Abu Dhabi this year reminded me of Hong Kong pre-2008, but with a distinctly 21st-century twist. Just as Hong Kong served as the gateway between China and the world—with Shenzhen built on the other side to maximise that relationship—Abu Dhabi now positions itself as the neutral gateway to the Middle East and Africa.
The city offers compelling advantages:
Geopolitical Neutrality: The emirate maintains a delicate and fragile balance, hosting American military bases, Chinese state enterprises, and welcoming capital from both Russia and Europe. This neutrality is a crucial asset in an increasingly fragmented world—as emphasised by a strong discouragement of any contentious political or religious commentary at the ADFW to maintain a “business-focused and neutral environment.”
Regulatory Clarity: In the burgeoning digital finance sector, Abu Dhabi provides a clear regulatory environment, offering “sandboxes” and open communication to help nascent firms navigate applications and rules of engagement.
Abundant Capital: The financial ecosystem is characterised by significant capital depth, with one founder noting that “Tickets here are $100 million minimum.”
Modern Infrastructure: Visitors experience a “futuristic” environment, featuring state-of-the-art infrastructure, including a modern airport with seamless facial recognition systems and contemporary buildings.
Strategic Geographic Centrality: Abu Dhabi’s location offers excellent connectivity to major global hubs: Nairobi is 4 hours away, Europe 6, Singapore 7, and Hong Kong 8 hours away.
Yet behind the limitless perceived ambition lies a certain conservatism. Most players undergo lengthy discussions with regulators before licensing. The queue for regulation is long—a sign of both high demand and careful vetting on ADGM’s part.
The Regulatory Architecture: A Multi-Jurisdictional Framework
To understand Abu Dhabi’s strategy, you must grasp its sophisticated regulatory architecture—a multi-jurisdictional framework that balances flexibility with control while maintaining strict federal oversight of the national currency.
