Two months in the past, in a survey, 5 in 10 UAE residents stated they plan to make use of cryptocurrencies inside the subsequent yr. And 63 per cent admitted they’re extra open to utilizing them now than they have been a yr in the past. This got here as no shock. The Center East has established itself as a world hub for innovation in monetary expertise, due largely to the insurance policies framed by regulators within the UAE who perceive that the world is more and more adopting cryptocurrencies and blockchain expertise.
This progressive method for fostering innovation has been a serious affect for blockchain startups establishing in Abu Dhabi. Relating to it because the “Fourth Industrial Revolution”, the UAE authorities is a number one advocate of blockchain expertise. In 2018, with the intention to advance this adoption, the UAE launched the Emirate’s Blockchain Technique 2021, basically making a deadline for migrating at the very least 50 per cent of all authorities transactions onto decentralised expertise.
In 2018, the Monetary Companies Regulatory Authority (FSRA) of the Abu Dhabi World Market (ADGM) launched a framework for working crypto asset companies that, with steady engagement and refinement, represents a beautiful and permissive regulatory equipment. This has allowed Abu Dhabi to change into a beautiful jurisdiction for blockchain, fintech, and crypto firms, each giant and small. For instance, the FSRA is likely one of the first regulators on the planet to recognise stablecoins and outline fiat tokens, with the Digital Asset Alternate receiving the inexperienced gentle for operations beneath that formulation.
The substantial authorities sources which were delivered to bear on monetary expertise innovation have created large alternatives to develop companies and have inspired a vibrant entrepreneurial spirit. That is evident all through the neighborhood of the ADGM.
Residence to world-renowned universities, the schooling system of Abu Dhabi contains the NYU Abu Dhabi campus in addition to Khalifa College, recognised as the highest college within the UAE. Many graduates of those establishments have gone on to contribute to cutting-edge technological developments similar to blockchain and synthetic intelligence, serving to to make Abu Dhabi a frontrunner in international innovation.
Supported by Abu Dhabi’s Ghadan 21 stimulus programme, the Hub71 accelerator neighborhood in ADGM has succeeded in attracting 102 startups to Abu Dhabi. Moreover, knowledge from a startup platform confirmed that the UAE led the Center East area in funding progress by variety of offers and funding within the first half of this yr, and that fintech startups closed essentially the most variety of offers.
Abu Dhabi Catalyst Companions Restricted is one other advocate for distributed ledger expertise – a digital decentralised infrastructure – that drives innovation. Moreover, Fintech Abu Dhabi, Mena’s main fintech pageant, is an occasion that pulls traders and entrepreneurs to the area. Clearly, the regulatory panorama within the ADGM is a driving drive behind the Center East’s progress as a crypto and blockchain innovation hub.
For residents, the extent of digital transformation in funds has had tangible results, resulting in adjustments in shopper behaviour. Current analysis from the net portal Fintech Information Center East confirmed that 2020 noticed a rise in digital funds and an increase in fintech firms primarily based within the UAE; 134 fintechs have their headquarters within the nation. The vast majority of these are firms centered on fee/e-wallet, blockchain and cryptocurrency.
It’s obvious that there’s a robust urge for food for crypto and monetary innovation within the area. Within the UAE alone, over the previous two years, the whole worth of digital fee transactions has greater than doubled and reached $18.5 billion in 2020.
Along with a constructive regulatory method, the pandemic resulted in folks’s openness to digital funds. The survey that discovered half of UAE residents amenable to utilizing cryptocurrencies subsequent yr additionally confirmed that two-thirds of UAE respondents had, over the course of the pandemic, tried a brand new fee methodology they might not have used beneath regular circumstances. So the function of how the pandemic modified behaviour can’t be understated.
There are different elements too – similar to regulatory pragmatism, investor safety and tax incentives – which have helped enormously to create ADGM’s optimum framework for funding and blockchain and crypto innovation. Abu Dhabi’s ecosystem has performed a important half in digital transformation up to now, and clearly, it reveals no indicators of slowing down.
John Hensel is co-founder and chief working officer of Securrency, a expertise agency, and relies in Abu Dhabi
Up to date: September twelfth 2021, 9:10 AM