By Gary Peters – CES Investments
DUBAI, UAE, July 08, 2022 /24-7PressRelease/ — Dubai and Abu Dhabi are making a major play for the cryptocurrency crown. Big crypto exchanges like FTX last valued two months ago at $33 billion are setting up shop in Dubai and Abu Dhabi. There are a number of reasons why it might be to their taste.
The crypto exchange’s CEO Changpeng “CZ” Zhao — recently ranked as one of the richest people in the crypto community —even tweeted a photo of himself in a traditional white Emirati robe, the kandura, captioning it with an emoji of the Emirati flag. This speaks volumes about how the U.A.E is embracing innovation and successful companies moving their headquarters to the desert oasis of opportunity.
“I think it’s remarkable how all levels of the U.A.E government have embraced the Crypto space, provide a regulatory framework, quality of life and the freedom to innovate,” says Gary Peters.
Crypto is growing fast: total transaction volumes grew over 500% to $15.8 trillion in 2021, according to Coinbase and Binance. Yet plenty of Western regulators seem to have a problem it. Perhaps as a result, even the two largest cryptocurrencies, bitcoin and ether, are yet to have a dedicated supervisory body in the United States and the UK. Singapore has imposed stricter regulations, despite expressing interest in the market.
That leaves a gap for an ambitious locale willing to build its regulatory architecture around crypto, rather than vice versa. Step forward Dubai and Abu Dhabi. In the last six months, the pair have handed out more than 39 licenses and passed new laws for crypto exchanges to operate in the cities. The exchanges have responded. Binance is recruiting for over 100 positions in the Gulf, while boss Changpeng Zhao has moved from Singapore to Dubai and bought a home there. FTX and Kraken are heading Gulf-wards, too. Rumors are circulating that larger players are eyeing the United Arab Emirates.
The mutual love-in has a certain logic. Total private wealth held in the United Arab Emirates rose by $46 billion between 2019 and 2021 as some 5,600 millionaires moved to the country, according to the Global Citizens Report, and an influx of Russian oligarchs should amplify the trend. Around 25% of Middle East millionaires already invest in some kind of crypto, data from consultant Knight Frank shows. Meanwhile, local businesses like grocery delivery service YallaMarket and property firms are accepting payments in crypto, and the former has floated the idea of paying salaries in the currency. A global YouGov survey found that trust in cryptocurrencies was highest among adults in the UAE, despite the volatility of the markets in the past six weeks.
A Gulf crypto hub makes a lot of sense. On the other hand, if these elements can be managed and regulated then it could equally give the region what it could really use: a leading position in a major financial growth sector. The Leadership in Abu Dhabi and Dubai has always taken a long-term approach to innovation, providing the needed transparency and controls to allow individuals and companies to benefit from a world-renowned infrastructure, protections and regulations to set the benchmark for the world to follow.
There currently are more than 400 businesses operating in the crypto space in Dubai. The authorities have forecasted that the number will cross more than 1,000 by end of the year.
This will certainly add to the increased interest amongst investors, and we expect to see an explosion of Web 3.0 based start-ups, new jobs, and investment opportunities in the region.
In his capacity as the Ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum launched Dubai’s new virtual assets regulatory law – and the corresponding new virtual assets regulatory authority (VARA) – to regulate, supervise, and control virtual asset services.
Under the new law, VARA will set the rules and controls that govern the conduct of virtual assets activities, including management, clearing, and settlement services, as well as classifying and specifying types of virtual assets.
The legislation is meant to provide a regulatory framework for businesses dealing with cryptocurrencies in various formats, including tokens, decentralized finance (DeFi) projects, and non-fungible tokens (NFT’s).
CES Investments: Capital and Equity Solutions Investments (CES Investments) is incorporated in Dubai International Financial Centre (DIFC) and is regulated by the Dubai Financial Services Authority (DFSA).
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