Regulation & Policy
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Senior English Editor
Uncertainty and significant changes have become a characteristic of the trajectory of cryptocurrencies. Since their inception, various setbacks and crises have contributed to delays in achieving their intended potential, as well as the potential of blockchain technology, to positively impact the world's economies through increased transparency and digitization.
However, the United Arab Emirates has taken a different approach, with a visionary decision to embrace this technology from the beginning.
As Dr. Aisha Bin Bishr, former CEO of Smart Dubai, stated in a 2017 interview, "We have the opportunity to adopt this technology and shape its development, which is in line with our goals, and use it in a way that suits our economy instead of using other technologies and mechanisms developed in advance."
As a matter of fact, the UAE's current success in the field of digital currencies and blockchain is a result of the country's belief in the importance of this technology and the bold decision to position the country as a global leader in these areas.
The Minister of State for Foreign Trade, Thani Al-Zeyoudi, confirmed that digital currencies are one of the areas in which the UAE is looking to expand.
In this context, Al-Zeyoudi said, “Digital currencies will definitely play a major role in the UAE's trade in the future.”
The minister noted the importance of establishing global governance for cryptocurrencies and crypto companies. He further stated that as the UAE develops its crypto regulatory framework, it will aim to become a hub for crypto-friendly policies with adequate protections in place.
He added, “We started attracting some companies to the country with the aim of building together the right governance and legal system, which are needed.”
In addition to that, a day before Al Zeyoudi's interview, Omar Sultan Al Olama, Minister of State for Artificial Intelligence, explained at the World Economic Forum that the UAE remains committed to its goal of becoming the world's digital currency hub regardless of the market crash.
These assurances from the ministers coincided with the announcement of encouraging numbers that appeared in the latest CryptoOasis report, which showed the registration of more than 200 new institutions in the fourth quarter of 2022.
These companies have attracted more than 1,300 skilled professionals to their technical environment, raising the number of individuals working in this sector to more than 8,300, and the number of companies to more than 1,650, with a faster-than-expected growth rate.
“We are thrilled to have these new organizations joining us and creating a diverse community of stakeholders,” said Ralf Ralf Glabischnig, founder of Crypto Oasis. “The potential of Web 3.0 technology is enormous, from finance and supply chain management to games and social media.”
He continued, “Because it is a relatively new and emerging technology, its full potential has not yet been reached. Moreover, the sector has been facing challenges such as scalability, security, and user adoption. It is an exciting and rapidly evolving field and we are keen to collaborate and learn from each other as we improve.”
Saqr Ereiqat, co-founder and managing partner at Crypto Oasis, also commented on the matter, "The United Arab Emirates is an ideal environment for the development and growth of various industries, including cryptocurrency and blockchain. The country boasts a diverse and highly-skilled workforce, with a wealth of talent and expertise in various fields. In fact, the UAE has a strong economy and access to significant capital, providing an ideal environment for businesses to thrive. Furthermore, the country's world-class infrastructure and modern facilities provide an optimal setting for businesses to operate, from high-speed internet to advanced telecommunications systems. All these factors combined make the UAE a perfect place to set up a blockchain or cryptocurrency business and take it to a new level."
Last July, Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum launched the Dubai Metaverse Strategy, which aims to establish Dubai's position among the top 10 cities in the field of the metaverse.
The strategy aims to make Dubai a major hub for the global metaverse community and to increase the number of blockchain companies fivefold from the current number, following the emirate's success in attracting 1,000 companies working in the field of blockchain and the metaverse.
The Dubai Metaverse Strategy also aims to create 40,000 virtual jobs that contribute to economic prosperity by 2030.
Sheikh Hamdan also approved the launch of four major initiatives aimed at using the metaverse to provide government services. This includes a study for a new comprehensive system for government services.
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The study will consider the expected positive results, the extent to which services can be facilitated on metaverse platforms and the benefits to the community. It will also explore ways to grow and improve the system. The study will be referred to the Executive Council in Dubai.
The UAE government recently approved a new law regulating virtual assets, establishing the country's initial set of rules for the cryptocurrency sector at the federal level.
This follows previous efforts to supervise digital assets in specific financial areas, such as the Abu Dhabi Global Market (ADGM) and the Virtual Asset Regulatory Authority (VARA) in Dubai.
In this regard, Irina Heffer, a legal expert in the field of cryptocurrency and blockchain in the UAE, explained that the recent legal development has significant implications. She revealed that the new law requires entities involved in cryptocurrency-related activities to obtain a license and authorization from the newly established regulator, and failure to comply could result in heavy fines.
“Failure to comply leads to heavy sanctions, such as a fine of up to 10 million AED ($2.7 million), disgorgement of profits and even criminal investigation by the public prosecutor," she said.
The United Arab Emirates has been a leader in licensing the trading of digital currencies from the very beginning. While many countries have been resistant to digital currencies, the UAE has taken a proactive approach, resulting in full licensing for the trading of digital currencies.
This has attracted significant international investments from major investors and has resulted in the transfer of digital currency-related businesses to the UAE, making it a global hub for those working in this field.
The most important licensed crypto exchanges and crypto payment providers in the UAE are:
The Venom Foundation, based in Abu Dhabi, and Iceberg Capital have announced a new partnership in which it will invest $1 billion to fund Web 3.0 and blockchain companies.
The Venom Foundation will specifically focus on investing in decentralized Web 3.0 protocols and applications that are focused on areas such as payments, asset management, decentralized finance, and blockchain-based gaming-related products and services.
The partnership between Venom and Abu Dhabi Global Market (ADGM) investment management firm, Iceberg Capital, will provide funding for the development of blockchain, decentralized finance, and Web 3.0 related products and services.
Iceberg Capital will use its existing network to offer incubator programs, industry contacts, and support for marketing, platform listing, as well as technical, legal, and regulatory issues. The team will also finance and invest in projects and companies through seed and first round funding rounds. The goal of the partnership is to accelerate the creation of businesses in these areas.
Phoenix Technology and Cypher Capital, two venture capital firms headquartered in the United Arab Emirates, have announced many new partnerships, projects and investments in the Web 3.0 sector, the most important of which is the launch of a new $200 million fund that will focus on infrastructure and middleware investments in the Web 3.0 world.
“The consumer value proposition of Web 3.0 is a proposition that unites data, functionality and value, thereby creating opportunities for new and more efficient forms of applications and asset ownership. We don't just work with the best people, but we are also working on future-proofing our technology and ensuring that we can all benefit from a prosperous future catalyzed by cryptocurrencies", said Bijan Alizadeh, Chairman of Phoenix Technology.
Phoenix Technology, one of the leading cryptocurrency mining hardware retailers in the region and an integral part of the wider Phoenix Group of companies, has announced that it has entered into an exclusive and regional strategic partnership agreement with MicroBT, a blockchain technology company, to sell its WhatsMiner brand in the GCC.
The new distributor agreement is a win-win scenario for both companies, as the products will be exclusively distributed across the world, online and physical, through the Phoenix Store located on Sheikh Zayed Road, Dubai, UAE.
It is important to note that UAE-based Phoenix Technology has embarked on establishing a $2 billion crypto-mining farm in the UAE, which will be the biggest mining site in the area. The project will be finalized within six months, giving the region a taste of technological advancement and development.
There is no doubt that the United Arab Emirates has seen a significant amount of successful partnerships in the blockchain sector. These partnerships have been instrumental in driving innovation and growth in the industry. As a result, the country is well positioned for a prosperous future in the field of blockchain. With continued collaboration and investment in this area, the UAE is poised to become a leader in the global blockchain market.
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