Strides have already been made in that direction, with Dubai’s first official cryptocurrency, EmCash, already launched in 2018. Plans are also well underway to develop crypto zones in the country, which includes a special zone in the Dubai World Trade Centre (DWTC) where companies offering digital assets will be able to trade.
The DWTC will serve as a regulator for the crypto sector to combat money laundering and the financing of terrorism, while raising compliance standards as a whole.
More recently, it has been reported that Binance– the world’s largest digital asset exchange – intends to base its headquarters in either Dubai or Abu Dhabi. The company signed a memorandum of understanding with DWTC’s governing body to share its experience with regulatory bodies operating in the country.
Dubai’s growing crypto industry
2021 saw Dubai host several large-scale crypto events, including AIBC UAE, Crypto Expo Dubai and the World Blockchain Summit (which featured a charity boxing match between crypto influencers). The city is an attractive place to set up a cryptocurrency business, especially when you factor in the benefits of operating within a Free Zone.
The Dubai Multi Commodities Centre (DMCC) is one such Free Zone where you’ll find the DMCC Crypto Centre, which hosts a variety of blockchain companies who do not have to pay tax. This makes it easier to sponsor residence visas for employees and their families.
A 100,000-sq. ft. precious-metals refinery (the largest in the Gulf Cooperation Council) is being built in partnership with the DMCC, with blockchain used to track metal production. Stablecoins such as GoldCoin, SilverCoin and PlatinumCoin built on Ethereum will be issued as financial assets, with one unit equal to one gram of metal.
There are already over 400 crypto businesses operating in Dubai and the CEO of DMCC, Ahmed Bin Sulayem, anticipates this will rise to more than 1,000 by the end of 2022. Crypto trading laws in Dubai are relatively reaxed, and last year local regulators sought feedback on proposed laws. However, a new Dh1 million fine and 5-year jail sentence for cryptocurrency fraud shows that cybersecurity is not being taken lightly.
Looking forward to a crypto-future
While cryptocurrencies in the UAE are not licenced by the Central Bank, several cryptocurrency exchanges are allowed to operate within the Abu Dhabi Global Market, with hopes that permission will also soon be granted to exchanges in Dubai.
The development of a blockchain economy in Dubai is the next step in the evolution of a city heavily geared towards breaking new technological ground. For example, by 2030, 25% of Dubai’s road transport system will be powered by AI, while rooftop solar power becomes a mandatory requirement the same year. It’s these type of breakthrough developments that give Dubai every chance of becoming the capital of the blockchain industry, leading the way forward into a new era of digital finance.