Crypto and Blockchain in UAE
The United Arab Emirates (UAE) is a federation of seven emirates, each with its own unique identity. It is also the home to some of the most advanced technologies in the world. This includes cutting-edge smart cities, self-driving cars, artificial intelligence, and blockchain technology. The Dubai Future Foundation has been working on the latter since 2015. It is an ambitious project that aims to build a distributed ledger for the entire country.
A blockchain network allows users to create digital transactions without relying on any third party. In this case, it would be the government. These are stored in blocks, which can only be changed by consensus between all the nodes. They also have their cryptocurrency called DFM Coins. Terming it as the ‘Fourth Industrial Revolution,” UAE is at the forefront of leading the crypto and blockchain technology advancements.
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Defining Crypto and Blockchain
Blockchain refers to a distributed ledger of records that cannot be altered once entered into it. Cryptography is the process of securing information using codes. A blockchain is a public record of these transactions, where every node keeps a copy of the data. Each block contains encrypted data linked to previous blocks through cryptographic proof.
The Scope and Future of Crypto and Blockchain in the UAE
According to a report by Deloitte, the global market for crypto and blockchain will grow at a CAGR of 63% from 2019 to 2025. It is expected to reach $1.7 trillion by the end of 2025. According to the World Economic Forum, more than 500 companies have adopted blockchain technology, transforming the financial services industry. Over 10,000 start-ups are currently working on developing blockchain technology.
Here’s Why You Should Set Up a Company That Trades in Crypto and Blockchain in Dubai
Dubai is one of the fastest-growing economies in the world. It has become a hub for the international business community, attracting businesses from around the globe. With the rise of new technologies, the city is excited about the future. Here are some of the reasons why you should set up a company that trades in crypto and blockchain in Dubai:
1. Tax Benefits
As per the current laws of the UAE, cryptocurrency transactions are not taxed. This means that if you trade your cryptocurrency in the country, you do not need to pay taxes on it. There is no capital gains tax or income tax levied on cryptocurrency transactions. This is a huge advantage, especially for start-ups and investors who want to keep their profits untaxed.
2. Ability to Store Value
Cryptocurrency is not backed by any government, which means that any central authority does not control it. It is impossible to print more coins, so there is no inflation. Therefore, you can store your value in it without worrying about it being stolen or lost.
3. Security
With blockchain, it is almost impossible to hack the system. Since everyone shares the whole network, it is difficult to steal private keys. The only way to access the account is through the private key. Even if someone manages to get hold of the private key, they will not be able to transfer funds. Moreover, the blockchain is secure because it does not allow anyone to tamper with the data. This makes it highly reliable.
4. Low Transaction Fees
The fees associated with trading cryptocurrency are much lower than in traditional exchanges. For example, the average fee for buying bitcoin is 0.1%. The fee for trading stocks is 3-5%, depending on the exchange. The reason behind this is blockchain technology. Unlike centralized systems, the blockchain is decentralized. As such, it is not regulated by any central authority. This means that it has fewer middlemen, which results in low transaction fees.
5. Currency Conversion
You can convert your local currency into cryptocurrency and vice versa. This means that you can invest in foreign markets and use your cryptocurrency as payment for your purchases.
6. Low Initial Investment
Setting up a crypto exchange is easier than setting up a traditional stock exchange. You don’t need a lot of money to start a crypto exchange. The only requirement is a computer with an internet connection. All you need is a few thousand dollars to buy the initial coins.
7. Fast Transactions
Since the blockchain is distributed, transactions take place quickly. Transactions can happen in a matter of seconds. On the other hand, transactions take several days to go through when using traditional banking systems.
8. No Third-Party Interference
There is no interference from third parties. Unlike banks, the blockchain is completely transparent and does not have intermediaries. This means that there are no delays or errors in transactions.
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Crypto and Blockchain technology will transform the world in the coming years, and it’s an excellent opportunity for investors, entrepreneurs, and start-ups. If you want to learn more about setting up a firm for Crypto related activities, reach out to FlyingColour. For the past 17 years, Flying Colour Business Setup has been helping clients setting up the businesses globally. You can reach out to us at info@flyingcolour.com or contact us at +971 4 4542366.
