- Dubai can benefit from the growing cryptocurrency market.
- The United Arab Emirates and Dubai are “doing all the right things’’ to attract a lot of regional projects.
- Dubai has a great environment for setting up token projects and running a cryptocurrency exchange.
More and more countries are becoming seriously focused on the adoption of crypto, and the transactions of this mode of currency, and the Gulf States are no exception.
The United Arab Emirates have been trying to position themselves in a way that embraced the growth of the various emerging economic revolutions, and cryptocurrency has made its way to the forefront.
Claiming Rapid Growth
The Dubai Financial Services Authority (DFSA) has proposed a regulatory framework for various digital assets as part of its 2021-2022 business plan. So what does that mean?
Security tokens would create similar rights and obligations to traditional investment instruments. However, the framework would go beyond typical securities to also cover derivatives. Ultimately, this would consistently allow for the use of Distributed Ledger Technology (DLT) and other such innovations across the spectrum of investments.
The plan would thus facilitate a safe environment for crypto trading and ensure that the market can operate successfully without significant hiccups.
The DFSA has stated that this innovative regulatory framework would expand the DFSA’s regulation of digital asset issuers and their associated trading platforms:
‘’We are actively engaged with key stakeholders in Dubai and around the world on the future of finance and the rapidly growing area of financial technology, including various Distributed Ledger Technology applications.’’
Experts Are Positive
According to Stephen Stonberg, CEO of digital assets exchange Bittrex Global, The United Arab Emirates and Dubai are “doing all the right things and they’re going to attract a lot of regional projects,”
“It’s a great place to set up your token project, or run a cryptocurrency exchange,”
Stonberg said in his comment to Bloomberg.
Bittrex Global’s chief executive officer has also said that Dubai can benefit from the growing cryptocurrency market in the Middle East, as Dubai’s regulators push on towards acceptance of blockchain-based technologies.
Due to Dubai’s crypto-friendly policies, companies like Ripple have announced plans to set up shop in the region.
Dubai has already taken several steps to promote the use of blockchain within the city. For instance, the Dubai Airport Free Zone Authority signed an agreement with the Securities and Commodities Authority to help regulate, offer and trade crypto assets within the free zone.
The city’s DMCC, the world’s leading free zone and the government of the Dubai Authority on commodities trade and enterprise, has announced the launch of the DMCC Crypto Centre, a comprehensive ecosystem for businesses involved in the cryptocurrency and blockchain sectors. The DMCC Crypto Centre will be looking to attract crypto talent and larger crypto firms, seeking engineering and software skills.
On The Flipside
- No matter how good a system is, there is always a downside to the evolution of technology. The growth of cryptocurrencies in countries in the Gulf is accompanied by the various shortcomings attributed to the digital currency model.
- Speculation about the growth of illicit money laundering via the dark web is most prevalent in the Gulf, as cryptocurrency’s anonymity creates links to criminal affiliation.
Why You Should Care?
Tracking and learning from how countries adapt cryptocurrencies to their economic environment is beyond practical. Not only will this affect the crypto market, but it will also set an example for other countries to be able to follow.