The center of the crypto universe has been shifting toward Dubai since March 2022, when the UAE announced the world’s first independent crypto regulator: the Virtual Asset Regulatory Authority. With its stated intention to provide legal clarity for crypto, the No. 5 spot in CoinDesk’s Crypto Hubs 2023 has attracted jurisdiction shoppers such as Binance CEO Changpeng Zhao and crypto exchange WazirX.
Binance MENA General Manager on Future of Crypto - YouTube
Dubai: Launching a Crypto Regulatory Arm to Become a Global Financial Power
The center of the crypto universe has been shifting toward Dubai since March 2022, when the UAE announced the world’s first independent crypto regulator: the Virtual Asset Regulatory Authority. With its stated intention to provide legal clarity for crypto, the No. 5 spot in CoinDesk’s Crypto Hubs 2023 has attracted jurisdiction shoppers such as Binance CEO Changpeng Zhao and crypto exchange WazirX.
Dubai and its sibling hub Abu Dhabi were rated tops in the regulatory structure, the most heavily weighted criterion at 35% of the total score. But the impact was blunted by the UAE’s bottom-quintile crypto adoption score, indicating that the larger population of the UAE is not as crypto-savvy as the residents in these two hubs. Despite the low overall drivers category score, Dubai cemented its place in the top five with high scores in opportunities category, which measured per-capita crypto events, companies and jobs. The emirate also achieved the second-highest quality of life score in our entire sample. Part of the enablers category, quality of life was the second-heaviest weighted criterion, at 15% of the total score.
The biggest names in crypto seem to be gravitating to Dubai, the largest city in the United Arab Emirates (UAE). Binance co-founders Changpeng “CZ” Zhao and He Yi have made it their home, Coinbase’s Brian Armstong has met with its regulators. And Wazirx, one of India’s largest exchanges, is moving its headquarters there. It seems Dubai’s master plan to enter the top echelon of global financial centers, joining New York, London and Hong Kong, is working.
Dubai has been growing as a business and financial services hub for the Middle East over the last few decades by embracing innovation. That’s particularly evident in how it approached crypto with deliberation and intention.
In 2014 the local government engaged IBM to advise it on new technologies, Saqr Ereiqat, then IBM’s head of public sector consultancy in Dubai, said. He described how conversations kept coming around to blockchain, which eventually led the city-state to officially announce in 2016 that it was discussing a legal framework for cryptocurrencies. Six years later in March 2022, Dubai established the Virtual Asset Regulatory Authority (VARA), the world’s first independent crypto regulator.
As the crypto industry’s demands for clear regulation in the United States are met with a slew of lawsuits from the U.S. Securities and Exchange Commission (SEC), the UAE has emerged as a viable alternative. “It's unfortunate, the U.S.’ current position on the [crypto] space,” Bader Al Kalooti, executive director of Binance MENA, told CoinDesk. “But that doesn't mean that the rest of the world isn’t open to crypto. And Dubai and other markets in Asia have opened the doors.”
According to the Dubai Statistics Center, as of 2022, over 3.2 million of the Emirate’s total ~3.5 million population is non-Emirati, making it a “melting pot of people” as Al Kalooti explained. With such a diverse population, blockchain technology has numerous use cases in the city, ranging from remittances for those working in Dubai and sending money home or facilitating the flight of capital for those taking refuge from unstable economies.
Expansive use cases
What makes Dubai and the United Arab Emirates unique as a crypto hub is that “it offers a home for all those types of use cases,” Al Kalooti said. Indeed, shortly after establishing VARA, the government unveiled the Dubai Metaverse Strategy and its intention to create “one of the world’s top 10 metaverse economies as well as a global hub for the metaverse community.” The country aims to attract 1,000 blockchain and metaverse companies and create 40,000 virtual jobs by 2030.
Situated in proximity to Northern Africa, Asia and Europe, Dubai is not just a travel destination for those seeking a beach vacation, but also fosters global networking and collaboration. The city is the host of GITEX (Gulf Information Technology Exhibition), a leading tech conference featuring blockchain and Web3 as two of its 18 focus areas, that according to local reporting had 170,000 attendees in 2022. There is no shortage of crypto events in Dubai, including Binance Blockchain Week and Dubai Fintech Week.
After leaving IBM, Ereiqat co-founded Dubai-based Crypto Oasis, which develops blockchain ecosystems modeled after the Crypto Valley in Zug, Switzerland, the No. 1 spot in CoinDesk’s Crypto Hubs 2023. For those looking to build a team in Dubai, Ereiqat said, “the UAE’s most unique element is the access to talent [...] within three hours you have access to three billion people.”
Source: https://www.coindesk.com/consensus-magazine/2023/06/27/dubai-launching-a-crypto-regulatory-arm-to-become-a-global-financial-power/
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