The United Arab Emirates chase crypto and blockchain adoption
For a long time, the United Arab Emirates has been one of the most progressive crypto countries in the world. For example, government-owned licensing firm Kiklabb allows clients to pay for their visa and trade license fees via various digital assets to the Dubai Financial Services Authority, which announced its decision to work on a holistic crypto regulatory framework as part of its 2021 business plan.
In fact, as a result of Dubai’s crypto-friendly policies, Ripple, a firm that has recently been in murky waters with the United States Securities and Exchange Commission, announced its decision to open an office in the region. Furthermore, the UAE and Saudi Arabia are reportedly working on a joint central bank digital currency research initiative that has been dubbed “Project Aber.”
Commenting on why the UAE is fast becoming the destination of choice for some crypto/blockchain startups, Mazdak Rafaty, managing partner for Ludwar International Consulting FZC, told Cointelegraph
He further opined that blockchain as a novel disruptive tech was recognized very early by UAE regulators, as a result of which many governmental organizations were instructed not only to facilitate its development but actually utilize its advantages within a comprehensive e-government strategy.
Lastly, Rafaty added that while blockchain adoption was swift, cryptocurrencies definitely took more time to understand, utilize and regulate. Even in terms of crypto adoption, Abu Dhabi was one of the first regions to introduce a well-thought-out framework for exchanges and different types of tokens back in 2018.
The UAE already has the base
At a time when many countries are still struggling to formulate comprehensive strategies to adopt crypto-enabled technologies in a streamlined fashion — with some even looking to implement blanket bans — the UAE is seemingly laying the foundation for a digital ecosystem.
Providing his insights on the subject, Mohammed Abbas, co-host of the Dubai Global Blockchain Congress, told Cointelegraph that many projects, such as decentralized ride-sharing platform Drife and blockchain-based fantasy sports ecosystem DeFi Eleven, have been able to attract interest from the private offices of UAE’s Royal Families as well as other big-name players, such as San Francisco-based VCs like the Draper Walled Garden, adding
The UAE regulatory difference
Elucidating his thoughts on why the UAE regulatory landscape is different than most other nations today, Abbas pointed out that the Know Your Customer, Anti-Money Laundering and Counter-Terrorist Financing laws that are currently in place in the region are progressive when compared to those of other “global financial hubs.”
On the subject, Saeed Al Darmaki, co-founder of Alphabit crypto fund, told Cointelegraph that the UAE has been forward-looking with its adoption of crypto-enabled technologies for a long time, with the Arab powerhouses’ regulatory outlook looking very positive at the moment, adding:
A similar sentiment is shared by Austin Alexander, managing director for the MENA region of the cryptocurrency exchange Kraken, who believes that to date, the UAE has been among the most proactive locations globally in regulating cryptocurrency. In this regard, he pointed out that Abu Dhabi Global Markets was one of the first regulatory jurisdictions to draft a framework from the ground up specifically for digital asset exchanges, adding:
Are locals supportive ?
On the subject of how the local UAE population views the country’s tech-friendly stance, Rafaty opined that most residents have acknowledged the government’s blockchain initiatives. However, he did add that it will be some time before these projects actually start to bear fruit.
Additionally, he also shared that on the crypto side of things, most of his private and professional contacts in UAE are, to some degree, involved and/or invested in various crypto and altcoin offerings thanks in large part to the bullish growth that has happened in the sector over the course of the last few months.
Similarly, Alexander believes that UAE residents and businesses tend to embrace new innovation more enthusiastically than most, and cryptocurrency has been no exception. However, he added that for some time now, UAE residents have had some difficulty investing in digital assets, as there have been few legitimate local gateways for crypto exchange, adding
Lastly, Abbas believes that local residents and businesses in the UAE have quickly warmed up to the utility of the blockchain ecosystem and have been looking at cryptocurrencies as not just another financial instrument for monetary gains but also as a means to exchange and settle transactions among users operating within this domain.
In his view, the barriers for entry are getting lower by the day and that soon, mainstream retail crypto offerings will flourish within the country. “UAE is probably the only country that has been able to host some of the largest blockchain summits and bring crypto pioneers, think-tanks and investors on a common platform to address the global issues concerning financial inclusion and neo-banking solutions”, Abbas added.