Crypto & Blockchain in the UAE: Achievements & Opportunities

Since 2018, the UAE was at the forefront of crypto & blockchain adoption as its government, known for its fast modernization of its legal system, has invested heavily in adopting these technologies and set ground rules to become the biggest hub For crypto & blockchain technology in the world.

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Currently, the UAE's share of the global cryptocurrency market is over $25 billion in transactions, and it has climbed 500% between July 2021 and June 2022, a new report from Chainalysis reveals. Regionally, the UAE ranks third by volume, after Turkey's $132 billion in transactions and coming close to Lebanon's $26 billion. Across the country, businesses and users are becoming more comfortable with technology. According to a recent survey, half of UAE residents plan to utilize cryptocurrencies in the following year. while 63% of respondents said they were more open to using the technology than a year ago.

As emerging markets in the middle east continue to make inroads into the crypto landscape, discovering a myriad of use cases, particularly in the UAE, the gov’t has also developed a holistic approach to encourage blockchain technology adoption, recognizing its potential to boost economic growth.

UAE’s Achievements: How the UAE Government Embraced the Crypto & Blockchain Technology?

1. The Emirate's Blockchain Strategy 2021:

With the goal of converting at least half of all government transactions to decentralized technology, the first official step in adopting crypto & blockchain came in 2018. The Emirates Blockchain Strategy includes ambitious goals for the advancement of blockchain technology and its application in the UAE, including:

• AED 11 billion is saved each year on documents and other transactional records.
• AED 398 million will be saved by not publishing annual paperwork.
• Every year, digital transactions save about 77 million hours of labor work.

2.  The Abu Dhabi Global Market (ADGM) Financial Services Regulatory Authority (FSRA) published a framework for conducting crypto-asset enterprises. The framework, with some tweaking, has helped to establish Abu Dhabi as a desirable destination for blockchain, fintech, and cryptocurrency enterprises. 
3.  The Dubai Airport Free Zone Authority signed an agreement with the Securities and Commodities Authority in 2021 to allow for the provision and regulation of cryptocurrency trading within the free zone. 
    
4. In December 2021, The government-owned event and exhibition venue, Dubai World Trade Centre (DWTC), announced that it will become a “comprehensive zone and regulator of cryptocurrencies, products, operators, and exchanges”. According to the announcement, DWTC will team up with the private sector and all Dubai-based relevant entities to create “an attractive environment for the sector, and enforce rigorous standards for investor protection, Anti Money Laundering (AML), Combating the Financing of Terrorism (CFT) compliance and cross border deal flow tracing”.
    
5. UAE Issues National Crypto License (VARA)

The UAE has begun issuing a national crypto license for virtual asset providers (VASPs) and mining in the country as part of a push to regulate and embrace cryptocurrency. With the establishment of Dubai’s Virtual Asset Regulatory Authority (VARA), the Gulf state is set to woo a clutch of crypto firms with tailored regulations. 

While UAE has given the green-light to just a handful of 30 crypto heavyweights which applied for licenses hoping to expand to the MENA scene.

6. Abu Dhabi Launches Virtual Assets Strategy

Under the leadership of H.E. Mohamed Ali Al Shorafa, Chairman of the Abu Dhabi Department of Economic Development (ADDED) and Chairman of Securities and Commodities Authority (SCA), the Abu Dhabi Blockchain and Virtual Assets Committee (ADBVAC) held its inaugural meeting to discuss a strategy for blockchain and virtual assets that is in line with the UAE's economic strategy.

Thestartagy aims to increase Abu Dhabi's competitiveness in the blockchain and virtual asset arena and to coordinate the activities of businesses working in the sector, according to the Abu Dhabi Media Office.

7. The Dubai Blockchain Strategy:

The Dubai Blockchain Strategy, launched by His Highness Sheikh Hamdan, is the result of a collaboration between the Digital Dubai Office and the Dubai Future Foundation to constantly explore and evaluate the latest technological innovations that demonstrate an opportunity to deliver more seamless, safe, efficient, and impactful city experiences. Aimed at assisting Dubai in becoming the first city to be totally powered by Blockchain by 2020, as well as making Dubai the happiest city on the planet. Three strategic pillars will be used in the strategy: government efficiency, industry creation, and international leadership.

8. UAE’s Blockchain Council:

Dubai Future Foundation founded the Worldwide Blockchain Council to research, discuss, and organize transactions on the blockchain platform as part of its attempts to incorporate the latest technology and innovation techniques on a global scale. The Council will facilitate transactions in the financial and non-financial sectors while also increasing efficiency and dependability. The council is made up of 46 members from government entities, international corporations, leading UAE banks, free zones, and international blockchain technology enterprises.

9. Dubai Vehicle Chain

The Roads and Transport Authority (RTA) is developing a vehicle lifecycle management system using blockchain technology. The project's goal is to give a transparent record of the vehicle's history from the factory to the scrap yard to automobile manufacturers, dealers, regulators, insurance companies, purchasers, sellers, and garages. 

10. Metaverse Migration

Earlier this month, The Ministry of Economy of the United Arab Emirates (UAE) announced a new headquarters in the Metaverse, which is accessible to everyone in the world. The announcement was made during the Dubai Metaverse Assembly by UAE Minister of Economy Abdulla bin Touq Al Marri. The headquarters will be a multi-story building, with each floor having a particular role. Visitors will be able to purchase a ticket, which will cause a "customer happiness center employee" to enter the Metaverse and engage with them.The Ministry of Economy's customer service center in the digital world also provides services, according to Khalifa Al Jaziri, who’s avatar represents the ministry in the metaverse.

Also, Dubai Electricity and Water Authority have launched its 'DEWAVerse' platform on the Metaverse, making it the first local government organization to do so to give services to consumers, employees, and members of society.

11. Central Bank of the UAE Complete First CBDC Pilot Successfully

The Central Bank of the UAE announced the successful completion of the first CBDC pilot involving four jurisdictions and real-value transactions. The Bank of Thailand, the Central Bank of the United Arab Emirates, the People's Bank of China, the Hong Kong Monetary Authority (HKMA), and BIS are working together on the project. Twenty commercial banks from those locations also took part.

The trial took place from August 15 to September 23, 2022, on the mBridge Ledger, a custom-developed DLT platform. The 20 participating commercial banks utilized the platform to settle various payment types for corporate clients, with a focus on cross-border trade. More than 160 cross-border transfers and foreign exchange transactions worth more than $22 million (80 million AED) totaled over $12 million (44 million AED) in value. In October, a thorough status report will be made public, outlining technical design, legal, policy, and other regulatory aspects, as well as the mBridge project's long-term roadmap.

Crypto Opportunities in UAE

Without a question, the UAE is one of the greatest markets in the Gulf region and the world. Naturally, cryptocurrency trading units are more interested in entering and establishing themselves in the UAE market. According to estimates of Crypto Oasis, released Monday at a blockchain conference organized by the Dubai World Trade Centre, there will be over 1,400 active businesses and 7,000 individuals working with cryptocurrencies and blockchain technology in the UAE by September 2022.

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1. Crypto License from VARA

The UAE has positioned itself as a global futuristic innovation hub, as evidenced by the recent establishment of the Dubai Virtual Assets Regulatory Authority and the Dubai Metaverse Strategy, demonstrating the government's commitment to the implementation and advancement of cutting-edge digital economy solutions.

2. Emirates Airline Hires and Trains 4,000 New Cabin Crew in the Metaverse

Emirates, the largest airline which employs 16,000 cabin workers is planning to increase this number by 4,000 to close to 20,000 by next year, according to Adel Ahmed Al Redha, chief operating officer of Emirates The metaverse technology is utilized to train cabin crew, providing for efficient and precise training methods via simulated real-life circumstances. Also the metaverse will be crucial in training both newly hired and existing cabin crew.

3. Dubai Unveils Metaverse Strategy, Aims to Attract Over 1000 Firms, create 40k Jobs

The Dubai Metaverse Strategy intends to make Dubai one of the top ten metaverse economies in the world, as well as a global center for the metaverse community. The initiative hopes to capitalize on Dubai's success in luring over 1,000 blockchain and metaverse startups.