Dubai Continues March as World’s Web3 Capital

Dubai’s specialist Virtual Assets Regulatory Authority (VARA) formulated a Test-Adapt-Scale model that has proven to be a compelling proposition for global future economy companies. The model is a magnet for net-zero, high-value-add, technology-driven firms that are migrating to Dubai. The city seeks to become one of the top 10 metaverse economies and a global pioneer in adopting digital solutions, aiming to increase the number of blockchain companies by five times.

Among significant players moving to Dubai to join the VARA’s exclusive regime open to a limited number of licensees are some of the world’s largest and most credible virtual assets exchanges, such as Binance, FTX, crypto.com, Coinbase and Bybit. This is in addition to traditional finance icons offering DeFi solutions like Galaxy Digital, Komainu, and Brevan Howard, native crypto service providers, and home-grown virtual assets enterprises like BitOasis and CoinMENA.

Experts envision Web3 as the decentralized and democratized version of Web2, the current iteration of the Internet. Many believe it will include "crowd-owned" social media platforms, search engines and marketplaces, replacing the current "corporate-owned" format.

Dubai’s metaverse leadership Dubai is the world’s first and only jurisdiction with the foresight to set up a dedicated virtual assets regulator. In March this year, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, approved Dubai’s Virtual Assets Law (VAL) and established the VARA, firmly cementing Dubai’s leadership in the sector. The law ensures much-needed investor protection, economic security, and market transparency, backed by fully traceable and non-deletable transaction records.

Helal Al Marri, Director-General of the Dubai World Trade Centre Authority, which houses VARA, said, "Virtual assets are transforming the financial world and are set to be the primary drivers of the future global economy. The VARA regime is structured to catalyze collaboration and prioritize public protection."

Dubai is a pioneer in several new-age business sectors like FinTech and eCommerce. The Economist’s Digital Cities Index 2022 ranks Dubai first in the Middle East and 18th globally. Within the Index, Dubai is among the Top 10 in digital finance.

Since its formation, VARA has been busy forging an enabling ecosystem and identifying a highly selective list of global participants from among the hundreds of industry players it attracts. It is enabled by partnerships with some of the world’s most recognised players like Chainalysis, Elliptic, AnChain and Coinfirm. Financial services company Fintonia Group, crypto trading app OKX, and digital brokerage GCEX recently announced their Dubai launches after receiving provisional virtual assets licences from VARA.

OKX, for one, has joined its global peer exchanges to move its regional headquarters to Dubai. At the same time, Fintonia expects to expand its team in Dubai and provide tailored Treasury and Balance Sheet management services to Token Foundations, protocols, Bitcoin miners and other large holders of digital assets, the company said.

Piecing together the regulatory jigsaw With VARA and VAL, Dubai is now at the forefront of the virtual assets industry and continues to play a critical role in its growth, evolution, and regulatory future.

Part of the policy and regulatory jigsaw, the Dubai Metaverse Strategy and the Dubai Blockchain Strategy aim to position Dubai as a global centre for evolving technologies. The Dubai Blockchain Strategy is one of the many initiatives with 24 blockchain use cases currently implemented across eight key industry sectors, including finance, education, and real estate.