With 1,400 crypto companies such as Binance and Huobi settling in, where is the attraction of Dubai?

Financial Associated Press | Blockchain Daily (Hangzhou, reporter Xu Cihao) news, a few days ago, Saudi Arabia announced that it will invest 6.4 billion US dollars for meta-universe and blockchain technology.

In fact, the United Arab Emirates, also an oil power, has always been one of the countries in the world that support and embrace blockchain, and Dubai in the United Arab Emirates has become one of the gathering places for blockchain companies.

According to local news reports in the UAE, the digital economy contributed a total of about 100 billion dirhams (US$27.25 billion) in 2021, accounting for 4.3% of the UAE's GDP. The country is home to more than 1,400 blockchain and crypto startups with a total valuation of AED 90 billion ($24.5 billion). According to government figures, more than 90 investment funds and 12 business incubators are also supporting the country's digital industry.

Industry insiders analyzed to the "Blockchain Daily" reporter that blockchain as a new technology, in the global treatment of different; and Dubai through the open policy, attract the world's blockchain enterprises and talents, in the future development of the blockchain industry to occupy the opportunity.

1400 crypto companies settled in

The United Arab Emirates, or "UAE" for short, is a federal state consisting of seven emirates– Abu Dhabi, Dubai, Sharjah, Fujairah, um Al Quwain, Ajman and Ras Al Khaimah. The UAE is known as a flower in the desert due to its oil production.

But oil countries also have a sense of crisis, that is, oil resources are not inexhaustible, and the flowers in the desert will wither. They must find new opportunities for wealth.

The blockchain and encryption industries, represented by Bitcoin, have seen new vitality in some small countries, including the United Arab Emirates, Saudi Arabia, and El Salvador.

Dubai in the United Arab Emirates is on its way to becoming a bitcoin trading center. Hundreds of binance, ALPEX, Metahero companies ( including more than 90 investment funds and 12 business incubators ) have chosen Dubai as their fulfillment hub.

In 2021, China set off a round of virtual currency mining and transaction rectification, and a number of Chinese blockchain and crypto asset companies also moved to Dubai to seek compliant operations in the local area. Among them, there are Huobi exchanges, Tiger Symbol exchanges, coinw exchanges, etc. that have completed the liquidation of Chinese mainland users at the end of 2021.

The "Blockchain Daily" reporter learned from the relevant people in Huobi that Huobi currently has an office in Dubai, which has domestic employees and local employees.

"Dubai has been quite aggressive about blockchain enterprise policy." The above-mentioned Huobi related person told reporters.

In addition, on December 20, 2021, cryptocurrency exchange Binance signed a cooperation agreement with the Dubai World Trade Center Authority (DWTCA) to jointly promote the establishment of a new international crypto asset ecosystem in Dubai.

An exchange insider who did not want to be named told the "Blockchain Daily" reporter that in view of Dubai's current open policy for exchanges, they are also actively seeking Dubai's virtual asset trading license, and will operate and relocate to the place when the time is ripe.

Due to the UAE's open policy on cryptocurrencies, it has attracted many businesses to settle in. According to local news reports in the UAE, the digital economy contributed a total of about 100 billion dirhams (US$27.25 billion) in 2021, accounting for 4.3% of the UAE's GDP. The country is home to more than 1,400 blockchain or crypto startups with a total valuation of AED 90 billion ($24.5 billion).

Dubai's policy of openness

The Blockchain Daily reporter learned that the regulation of cryptocurrencies in Dubai is done by FRSA (Financial Services Authority), SCA (UAE Securities and Commodities Authority) and DFSA (Dubai Financial Services Authority).

In order to provide crypto services in the UAE or Dubai, a license from SCA or FRSA is required (depending on the location of operation). Trading in cryptocurrencies is regulated by the SCA and FRSA and licenses may be granted depending on the nature of the cryptocurrency traded.

At the end of 2020, the UAE Securities and Commodities Authority (SCA) issued Decision 2020 (21/RM) of the Chairman of the Authority on the Regulation of Crypto Assets.

The regulation aims to establish an explicit licensing regime for any provider wishing to provide crypto asset services within the UAE, which includes initial token offerings based on or utilizing crypto assets, exchanges, marketplaces, crowdfunding platforms, custodial services and related financial services.

The Crypto Regulatory Decision states that providers wishing to provide crypto asset services (or any related services) must be incorporated within the UAE or within one of the UAE's financial free zones (i.e. Dubai International Financial Centre or Abu Dhabi Global Markets) and must be licensed by the SCA. As part of the process, applicants must demonstrate that they will strictly comply with the UAE's anti-money laundering and counter-terrorism financing laws, cybersecurity compliance standards and data protection regulations.

Blockchain layout in Dubai

Marwan Alzarouni, CEO of Dubai Blockchain Centre, said in an interview with the media that the UAE, especially Dubai, has been forward-looking and rapidly developing in any future technology, and crypto assets and blockchain are no exception.

Back in 2013, the UAE launched the Smart Dubai Initiative, a core part of which is to improve government efficiency through the use of blockchain technology, including its own actions to promote the development of blockchain from 1.0 (payment instrument) to 2.0 (financial industry applications) to stage 3.0 (other industries and government management applications), aiming to make Dubai a global leader in this field.

In 2016, Dubai established the Global Blockchain Council, which currently has more than 30 members, including government entities, international companies, and blockchain startups. Microsoft, SAP, Cisco and other technology giants are members of this committee.

The Global Blockchain Council held its 2016 industry-themed conference and unveiled 7 new blockchain proofs of concept, including: medical records, secure jewelry transactions, transfer of ownership, business registration, digital wills, tourism management, and improved freight. It can be said that Dubai is currently the blockchain research and development center in the Middle East.

In 2017, the Dubai government announced that Emerald, a subsidiary of Dubai Economy, would partner with US-based startup Object Tech Grp Ltd to create an encrypted digital currency called emCash.

In 2018, Dubai Prime Minister Sheikh Mohammed announced that the Dubai government would adopt blockchain technology for half of its government operations by 2021.

In 2020, in line with the vision of the Dubai Block Chain Strategy 2020, Smart Dubai fulfilled its commitment to building a thriving blockchain ecosystem in Dubai, launching numerous use cases, a joint blockchain platform and a Dubai blockchain policy. Government and private sector agencies are committed to enabling 24 blockchain use cases. These use cases cover eight sectors, namely finance, education, real estate, tourism, commerce, health, transportation and safety.

The UAE has reportedly completed a digital KYC project called the Emirates Pass, which will enable users to interact with all aspects of the legal process from remote locations, and has already adopted blockchain technology in its judicial notarization and authentication services.

The UAE has also proposed a plan to transform Dubai into the world's first city driven entirely by blockchain technology – the Dubai Blockchain Strategy, making Dubai the happiest city on earth.

Hu Jie, a professor at Shanghai Jiao Tong University's Shanghai Advanced School of Finance, told the Blockchain Daily reporter that the UAE and Dubai, as oil powers, are actually relatively single and fragile in resources, and the Dubai government has been thinking about how to find opportunities in the new economic system.

Hu Jie said that blockchain as a new technology, the world is still in the stage of exploration and precipitation, Dubai through the open policy, attract the world's blockchain enterprises and talents, in the future development of the blockchain industry to occupy the opportunity.