The UAE’s Growing Appetite for Crypto and Blockchain
Dubai being a rapidly developing city is on its way to become the commercial hub of the world by adopting novel ideas in communication and technology. As Cryptocurrency and Blockchain technology is the new normal in our digitally transformed world, Dubai is well on pace with this financial evolution. Regarding it as the “Fourth Industrial Revolution”, the government has framed regulatory guidelines and policy directives to govern the creation, management, and expansion of Blockchain networks across Dubai and the UAE. The Emirates Blockchain Strategy 2021 is such an effort on the part of the government, recognizing and identifying UAE’s growing appetite for Crypto and Blockchain Technologies.
It was in 2018 that the UAE government launched the Emirates Blockchain Strategy 2021, with an aim to transform 50 percent of government transactions into the blockchain platform by 2021. In 2018, the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Gold Market (ADGM) introduces a framework for operating crypto asset business in the region resulting in it to become an attractive jurisdiction for blockchain, fintech, and crypto companies. Recent research from the online portal Fintech News Middle East showed that 2020 saw an increase in digital payments and a rise in fintech companies based in the UAE whereby a majority of these are companies focus on payment/e-wallet, blockchain, and cryptocurrency. The Dubai Blockchain Strategy intends to assist Dubai in achieving the vision of H.H. Sheikh Mohammed bin Rashid Al Maktoum by making “Dubai [will be] the first city fully powered by Blockchain by 2020.”
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Using the three strategic pillars of Government Efficiency, Industry Creation, and International Leadership, the Dubai Blockchain Policy aims to:
1) Facilitate the resolution of Blockchain implementation challenges through guidance and policy directives
2) Govern the creation, management, and expansion of value-creating Blockchain networks across
Dubai and the UAE
3) Support and drive the adoption of Blockchain technology especially for government entities Minimize security and privacy risks associated with Blockchain implementation and distributed
ledger
4) Provide a legal foundation for supporting digital services and dispute resolution
Furthermore, Blockchain technology is expected to help save time, effort, and resources as it facilitates people to process their transactions at the time and place that suit their work and lifestyle. In addition to this, the UAE government also anticipates to save:
- AED 11 billion in transactions and documents processed routinely
- 398 million printed documents annually
- 77 million work hours annually.
In order to ensure safety and security in digital transactions, each customer will be given a unique identification number that points to their information on a secure chain. This ensures the security of national documents and transactions as the information and data on the blockchain will neither be hacked nor changed. These regulatory measures and the pandemic-resulted reliance on digital wallets have increased the people’s appetite for crypto and blockchain technology, proven by the digital transactions that occurred in UAE of which the total value reached a whopping $18.5 billion in 2020 alone.
Cryptocurrency and blockchain technology are undoubtedly the new normal of our world, proven by the increasing interest towards the same. Right knowledge of the changing trends is very important and so is the awareness of laws and regulations governing them. For the past 17 years, Flying Colour VAT and Accounting Services has been assisting its clients in all matters related to the UAE laws and regulations. Please feel free to mail your queries at info@flyingcolour.com or contact us at +971 4 4542366.
