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Dubai stands head and shoulders above its Middle Eastern peers as one of the glitziest and most forward-thinking cities in the region. The eponymous capital of one of the most important of the UAE’s seven emirates, Dubai is often viewed as an oasis, with its glistening skyscrapers, its multicultural population, and pro-business attitude standing in stark contrast to other parts of the Middle East.
The city grew from what was just a small fishing village in the 19th century to become a flourishing trading post following the decision of its ruler to eliminate taxes on imports and exports in 1901. Later, Dubai literally struck gold, with the discovery of immense oil and gas reserves leading to an influx of immense wealth. The city has since emerged as an international center of finance and business, with a reputation as one of the most progressive nations in the region,
Looking to build on this platform, Dubai is now bidding to transform itself into a cryptocurrency and blockchain hub, with some of the most crypto-friendly policies and regulations of any territory in the world.
Dubai has rapidly nurtured its nascent crypto ecosystem in recent years, with one of the key milestones being the Dubai Multi Commodities Center’s launch of the DMCC Crypto Center in 2021. The DMCC provides a platform for crypto entrepreneurs and startups to develop and launch new projects in the city, with a range of easily accessible services available including incubation, mentoring, and funding.
Crypto-Friendly Policies
One of the major factors enticing crypto startups to set up shop in Dubai is the Virtual Assets Regulation Authority, or VARA, which was established in early 2022. VARA is an independent organization operating under the Dubai World Trade Center Authority that’s tasked with overseeing the regulation, licensing, and governance of cryptocurrencies, non-fungible tokens (NFTs), and other kinds of digital assets. It has a number of responsibilities, such as regulating the issuance of new cryptocurrency tokens, supervising the trade of virtual assets, monitoring transactions, and ensuring that regulatory standards are met. VARA’s duties also extend to providing management and exchange services and virtual asset custody.
Dubai’s warm embrace of crypto has been demonstrated in many other ways too, with the city’s government launching its very own cryptocurrency, known as emCash. It’s designed to be used for day-to-day transactions within the city, and residents can use it to pay their utility bills, purchase groceries, and more. Alongside emCash, the government has launched an official app called DubaiPay, which can be used by residents to pay for official services.
To foster the growth of its crypto ecosystem, Dubai has also launched initiatives such as the Dubai Blockchain Strategy, which is a collaboration between the Dubai Future Foundation and the Smart Dubai Office that aims to continually explore and evaluate how blockchain technology can be used to improve residents’ lives.
Expanding Blockchain Hub
The regulatory body VARA has taken an incredibly positive stance on blockchain and crypto projects, granting licenses to major cryptocurrency exchanges such as Binance, Kraken and Bybit, for example. In the case of Binance, the world’s biggest cryptocurrency exchange by trade volume, it has established its regional headquarters in Dubai, where it has more than 200 staff across three offices.
Another big player in Dubai’s crypto scene is MaskEX, a Canadian crypto exchange and wallet platform that was founded in 2021. MaskEX has since chosen Dubai as the location of its main headquarters, where it pitches itself as a more neutral provider compared to Coinbase in the U.S. and Binance in China, offering an array of crypto trading options and services.
It’s not just exchange platforms that are finding a welcome home in Dubai. Other prominent startups in Dubai’s crypto ecosystem include Emcredit, the company responsible for the development of emCash, and Verify, a distributed reputation protocol that’s building an e-commerce payments platform and reputation tracking system for buyers and sellers. Evareium, meanwhile, is a project that aims to democratize real estate investments through the use of digital assets and tokenization. There’s also Loyyal, which is building a blockchain-based loyalty rewards program ecosystem and counts numerous Fortune 500 firms, including Deloitte and IBM, as its customers.
Dubai’s crypto startups have begun playing a prominent role in the development of its wider blockchain ecosystem and regulatory framework, too. For instance, Binance is said to have played a key advisory role in helping to shape the regulatory framework, while MaskEX is one of the main driving forces behind UAE’s “smart city” ambitions, with plans to use its blockchain technology and infrastructure to improve the quality and accessibility of services. As it expands throughout the Middle East and North Africa region, MaskEX sees itself playing a key role in helping Dubai’s residents adapt to smart cities. Meanwhile, Loyyal has partnered with Smart Dubai to develop a crypto incentive program for DubaiNOW, a government services application.
Widespread Crypto Payments
Dubai’s positive attitude towards blockchain has meant rapid growth in the number of companies accepting crypto for payment too. Perhaps the most notable example is that of Dubai’s iconic airline, Emirates, which said last year it will accept Bitcoin as payment for flight bookings. Emirates has also launched its own NFT collection, which provides holders with exclusive metaverse experiences.
Crypto adoption elsewhere in the city is rife, with the grocery delivery service YallaMarket now accepting payment in several cryptocurrencies, and also pondering the idea of paying its delivery drivers in crypto. The real estate developer Emaar Properties was one of the earliest adopters, announcing back in 2019 it would accept payment in Bitcoin and Ethereum. Moreover, the luxury car dealer BitCar allows customers to buy vehicles using the same cryptocurrencies.
This Is Just The Beginning
The rise of Dubai as one of the world’s foremost crypto capitals looks unstoppable, with the city’s reputation for innovation and technology and its friendly regulatory stance making it an attractive destination for blockchain startups and investors alike.
Dubai’s government has introduced no end of initiatives that aim to develop its blockchain economy, and it has become one of the world’s most accommodating locations in terms of crypto payments. Dubai has given birth to a number of crypto success stories already, and it can expect to see many more successful projects arise in the future.