Crypto News

The UAE blockchain ecosystem sector witnessed significant growth over the past year, recording 13.3% year-on-year increase, according to Crypto Oasis. 

During the Dubai FinTech Summit 2024, Crypto Oasis said the UAE blockchain ecosystem has active companies surging from 1,800 to 2,040, a surge that shows the industry’s robustness and innovation, bolstered by a workforce of over 10,600 professionals. 

The sector comprises 71% native blockchain organizations and 29% non-native companies contributing to the ecosystem.

The UAE’s blockchain landscape is thriving, and a diverse range of organizations are contributing to its success. Traders, brokers, and asset managers lead the way with 20.6%, followed closely by technology and advisory services at 19.9%. NFT platforms, venture capitalists, and the metaverse are also significant contributors. However, despite efforts to attract Web3 gaming companies, their presence remains modest at 3%, indicating room for growth. 

Tokenization platforms are carving out a niche and represent 1.5% of the country’s blockchain organizations. The past year has been pivotal for the UAE’s blockchain space, cementing its position as a global leader in innovation and disruption. Regulatory initiatives led by the Virtual Asset Regulatory Authority (VARA) have ensured responsible growth and market integrity. Notable milestones include granting licenses to leading crypto service providers such as Binance, OKX, Crypto.com, and others, enhancing the region’s appeal to blockchain enterprises.

Cryptocurrency adoption in the UAE has experienced a significant surge, cementing the country’s status as a growing hub for digital finance. The regulatory approval of Ripple’s XRP token by the Dubai Financial Services Authority (DFSA) and establishing the Iota Ecosystem DLT Foundation in ADGM highlight the country’s welcoming embrace of innovative technologies.

Emirates NBD has announced that Chainalysis will join its Digital Asset Lab Council. This move highlights the bank’s dedication to leading digital finance advancements across the Middle East, North Africa, and Türkiye. 

Chainalysis, a respected expert in blockchain analysis and compliance, will join other esteemed partners such as PwC, Fireblocks, and R3 as a founding council member of the Lab. 

By incorporating Chainalysis into the Digital Asset Lab, Emirates NBD is poised to enhance its innovative efforts in developing compliant and secure financial products and services. This strategic move, leveraging Chainalysis’ analytical expertise, aims to identify market trends, effectively meet customer needs, and elevate the integrity of its digital asset ventures, promising a brighter future for digital finance.

Miguel Rio Tinto, Emirates NBD’s Group Chief Digital and Information Officer, expressed his pride in the bank’s partnership with Chainalysis, underlining their shared commitment to introducing new solutions in the financial sector, a commitment that is sure to inspire further innovation. 

Rio Tinto highlighted the role of this partnership in promoting an open and trustworthy digital finance environment, which will help enhance customer trust and confidence in Emirates NBD’s digital offerings.  

Nicola Buonanno, the VP of Southern EMEA at Chainalysis, shared a similar view, emphasizing how important financial institutions are in shaping the future of digital assets, stressing the need for secure and reliable avenues for investor engagement, and highlighting Chainalysis’s commitment to working with Emirates NBD to offer safe and transparent digital asset services. 

The Digital Asset Lab was introduced at the Dubai FinTech Summit in May 2023, and it shows Emirates NBD’s proactive approach to accelerating digital asset and financial services innovation in the UAE. The bank has assembled a robust platform that includes industry experts. The aim is to foster innovative financial services ideas that use digital assets and underlying technologies. With a focus on digital assets, the Lab aims to leverage underlying technologies effectively, empowering customers to find the financial services they need in the fast-moving digital asset landscape. 

Emirates NBD’s strategic partnership with Chainalysis is a significant step towards pioneering advancements in digital finance. It reaffirms the bank’s position as a trailblazer in financial innovation in the MENAT region.

UK-based telecommunications giant Vodafone is exploring integrating crypto wallets directly into mobile phone SIM cards. 

David Palmer, who is the Chief Product Officer of Pairpoint by Vodafone, recently discussed this move in an interview with Yahoo Finance Future Focus. Palmer highlighted the company’s plans to promote the adoption of blockchain technology in managing crypto transactions on mobile devices.  

Palmer explained that Vodafone is dedicated to linking SIM cards to crypto wallets, aiming to utilize the cryptographic capabilities in SIM cards for effortless blockchain integration. The Pairpoint CPO elaborated on how the Vodafone subsidiary is driving the advancement of Web3 and Internet of Things (IoT) services by leveraging SIM card technology for blockchain-based digital wallets on mobile devices.

He shared his belief that by 2030, there will be around 5.6 billion digital wallets based on blockchain technology, which will act as gateways to financial services. 

Additionally, he estimated that around eight billion cell phones would be in use globally by the same year, providing access to this technology to at least 70% of the world’s population. These revelations came a few months after reports surfaced that Vodafone had partnered with Microsoft for a decade to offer AI services to its customers. 

Moreover, the telecommunications giant had previously shown interest in web3 and blockchain technology. Pairpoint, then known as Digital Asset Broker (DAB), had unveiled a proof of concept in collaboration with Sumitomo Corporation and Chainlink Labs. 

The proof of concept aimed to simplify the exchange of trade documents across different platforms and blockchains, addressing the inefficiencies that plague the global trade ecosystem, which is worth an estimated $32 trillion. It demonstrated the ability to exchange crucial trade documents seamlessly across various platforms and blockchains, a process often hindered by fragmented and incompatible systems.

Professionals working in licensing in Dubai believe that the Virtual Assets Regulatory Authority (VARA) has deployed comprehensive requirements for the cryptocurrency space. Although the licensing process can be lengthy, executives in the field say it is worth it. 

Cointelegraph interviewed several crypto licensing experts in Dubai to get their thoughts on the local licensing process and laws. One of the experts, Tao Xiao, the managing partner of business consulting firm NH Management, said that the VARA’s crypto licensing process can take up to a year. 

Xiao, who had previously worked at Dubai’s Chamber of Commerce, noted that the application process demands meticulous attention to detail and strong compliance measures.

Xiao said: “It’s an intricate and lengthy process. The process of obtaining the necessary licenses demands diligence and patience, as each aspect of the business undergoes scrutiny to ensure compliance with Anti-Money Laundering and Know Your Customer regulations.”

Xiao has emphasized that Dubai’s strict regulatory framework reflects its commitment to maintaining market integrity and safeguarding investor interests. By adhering to Anti-Money Laundering (AML) and Know Your Customer (KYC) standards, VARA ensures robust protocols to mitigate risks and prevent illicit activities in the crypto market. 

The United Arab Emirates (UAE) was placed on the Financial Action Task Force’s (FATF) “gray list” of jurisdictions under increased monitoring in 2022. However, the UAE introduced more comprehensive guidelines and laws to combat money laundering, removing the jurisdiction from the FATF’s gray list in February 2024. This means the country is not subject to additional scrutiny from the Paris-based financial watchdog, FATF.  

Xiao believed that despite the difficulty of compliance, there are many benefits to obtaining a license in Dubai. The executive emphasized that the requirements are not impossible to complete. Many projects are waiting for VARA licensing, indicating that meeting the requirements does not guarantee approval. However, it is essential to recognize that VARA’s objective is to ensure the safety and security of investors and the broader market, not to hinder progress. 

Xiao also highlighted Dubai companies’ benefits, including access to global markets, favorable tax policies, and a safe environment for financial technology innovation. 

Sam Blatteis, the CEO and co-founder of government affairs firm The MENA Catalysts, shared this sentiment and explained why it is worth it for companies to set up shop in Dubai. 

Blatteis stated, “The government is gradually doing for crypto what Silicon Valley did for tech. The country is quickly becoming the Coachella of the crypto world.” Blatteis also advised firms looking to expand into the UAE to implement a “strategic recalibration” and to seek the guidance of those who have gone through the process before, including those who have “cut the metaphorical ribbon” with officials and have gotten results.