Cryptocurrency options continue to expand across the 7 emirates that comprise the UAE. According to Visa’s recent Business Global study, every businessperson polled in the UAE stated they prepared to take some kind of electronic payments in the year, with some more (35%) expressing a desire to welcome cryptos like bitcoins.
Emiratis can use digital currency to pay for numerous things and not just commodities. Citizens School, a Dubai-based international school, recently revealed that it would allow bitcoin and Ethereum tuition payments whenever it officially opens to the first-ever group of students in September 2022.
What are the implications of these changes on the digital economy of the emirates and blockchain?
Though this is nothing similar to the amount of participation that traditional financial services have for consumers, the use of cryptos is exploding throughout the world. While many individuals are putting their money into cryptos as an investment option, its use is expanding to encompass retail, P2P payments, and in-game. Cryptos, as opposed to traditional financial vehicles, are highly unstable and regarded as hazardous businesses. Yet, people’s interest in cryptocurrency is growing.
Research demonstrates when early adopters invest in and utilize cryptos, participation with digital currencies distorts emerging economies with young consumers. According to the study, Indonesians transacted with cryptocurrencies the most (17%) in the last few quarters among the 18 economies studied, followed by India (16%), the UAE (15%), and Singapore (13%).
Higher Trust in Crypto
The UAE has the highest level of confidence in digital currencies of several of the markets studied in the survey, with two-thirds of UAE citizens looking to invest in or trade crypto within the next 5 years.
According to another report, the UAE acquired the most cryptocurrencies last year vis-a-vis other Middle Eastern countries except Turkey.
Remittances account for 2.4 percent of the Middle East’s overall GDP, with much of it coming from the UAE, where migrant workers returning money home established it as the world’s third-largest generator of remittances.
The survey indicates that the UAE government and authorities do an excellent job of marketing the UAE as a site for crypto firms, as does the choice of several crypto exchanges offering the latest cryptocurrency prices to start their businesses inside the emirates.
Bybit revealed in April 2022 that it would shift its operations to Dubai, and its rival Crypto.com acknowledged that UAE is its major regional base. In March 2022, BitOasis gained preliminary clearance from the newly created Dubai Virtual Asset Regulatory Authority, and FTX Europe Binance got virtual licenses. Other players like OKX are yet to make a decision on the same.
Also, India’s plan to tax crypto revenues at 30% will inspire at least a few Indian marketplaces to follow Polygon’s lead and relocate a part or all of their businesses to the UAE.
“The UAE is taking a notably different approach to many jurisdictions by clearly signaling to the global crypto industry that it is the place to operate out of,” as per the director of global regulatory matters at ConsenSys, Bill Hughes. ConsenSys is a blockchain software technology company.
“It is passing straightforward regulations that allow for easier registration for many crypto businesses than they would experience elsewhere.”
Aside from regulatory activities, the UAE’s geographic location offers a substantial marketplace for cryptocurrency platforms to enter.
According to the director of policy at Securrency, a blockchain-based fintech company, Jackson Mueller, “Its proximity to billions of people spread across several nearby markets presents firms with incredible opportunities for growth in the larger Gulf Cooperation Council region.”
“With a sizable number of financial firms and activity within ADGM (Abu Dhabi Global Market) and DIFC (The Dubai International Financial Centre), this concentration presents opportunities for collaboration between traditional finance and the digital sector.”
Cypher Capital, a venture capital firm located in the United Arab Emirates, created a $100 million blockchain technology crypto fund last month to participate in the blockchain, crypto, and other virtual currency ventures.
Cypher Capital is a shareholder in Crypto Oasis Sentio, the early investing arm of Crypto Oasis, which expects to invest up to $10 million in 50 to 100 crypto businesses.
According to Saqr Ereiqat, co-founder and managing partner of Crypto Oasis, the UAE crypto ecosystem is rapidly expanding due to an engaged audience and interchange between startups, financiers, researchers, and government representatives.
As previously stated, the UAE’s substantial ex-pat community makes it an important market for remittances. However, Ereiqat claims that value transmission extends beyond trade and transferring money overseas into fields, including virtual art, real estate, and sports.