The Finance World Magazine| Edition: March 2023

that it is likely to continue growing
in popularity.
“With zero percent tax, Dubai is
an appealing place to live for crypto
investors – and may be the second
choice for some UK residents... The
city also has a high quality of life with
a score of 175.84 – the seventh highest
overall,” Recap research said.
“Crypto assets have grown massively
over the past few years, and are
becoming increasingly interlinked with
the regulated financial markets, and the
fact that so many cities are embracing
it is a positive sign. Dubai being the
world’s second largest crypto hub is
good news for the government, who plan
to launch their own digital currency by
2026’,” said Daniel Howitt, co-founder
and CEO at Recap, commenting on
the research.
“At the same time, our research
shows that the world’s least developed
countries are significantly less prepared
to become crypto-hubs. Lack of
infrastructure, foreign investment,
and skilled workforce in the area may
explain why some are lagging behind.
This could cause barriers to trade with
more developed crypto-hubs in future
– so it’s important they’re all given
the opportunity to get up to speed,”
he added.
“While Dubai excels in attracting
crypto companies and jobs as a tax
haven, the city falls behind when it
comes to crypto events on offer and
R&D spend. More investment in these
areas could advance its position as a
global crypto-hub… The UAE has spent
a lot of time positioning itself as a
crypto hub, making a play at attracting
entrepreneurs and startups to set-up
shop. This could just be the beginning
for Dubai – it’ll be interesting to see
how crypto grows over the next year,
and whether or not Dubai can step up
to first place,” added Howitt.
On the other hand, Dubai Virtual
Assets Authority announced on Tuesday
07 Feb, 2023 a detailed regulatory
framework for the crypto sector,
which is set to turn the UAE into a
superhighway for the crypto sector.
Dozens of web3 and blockchain ventures
from around the world are expected
to arrive in the coming weeks and
months, thanks to this new regulatory
environment.
The new policy and regulatory clarity
are attracting top global industry
talent from around the world, which
is speeding up the country’s march
Approximately 66%
of adults in UAE
show interest in
cryptocurrency, while
many companies
engaged in the crypto
sector are present in
Dubai, making them
within reach of its
residents.
towards becoming the global hub for
Web3. This influx of top talent will
help the country develop new and
innovative technology solutions that
can benefit everyone.
VARA has issued extensive regulatory
norms on compliance and riskmanagement
standards for the sector’s
companies, as well as the requirements
on cyber security norms. These norms
will help protect investors and ensure
that sector’s companies are taking
appropriate measures to protect their
data and assets. The authority issued a
separate set of rules governing specific
activities, like issuing and exchanging
currencies, custody services, and
advisory services.
The regulatory framework that is
being put in place by the government of
Dubai will make it easier for companies
that are involved in the cryptocurrency
industry to create compliant blockchain
applications. This will help to speed
up the mainstream adoption of this
technology and help to grow the
economy in the region.
Industry insiders say that the UAE is
already a leading hub for the digital asset
industry, because the government there
is supportive of this kind of technology
and is doing a lot to promote it. This
new initiative will make things even
better for the industry in Dubai.
Moreover, the Abu Dhabi-based
Venom Ventures fund has announced
plans to invest $1B in various Web3
projects, including investments in
decentralized applications (dApps),
blockchain technology, and smart
contracts. The Venom Ventures fund is
one of the largest blockchain investment
funds in the world, and its investment
will help to further develop and promote
Web3 technologies.
The rules currently in place for
virtual asset service providers (VASPs)
to comply with anti-money laundering
and counterterrorism (AML/CFT)
regulations will protect investors and
consumers from fraud, ensuring that
people are not being taken advantage
of financially, and that their money
is being used safely and legitimately.
“The government of Dubai has
disclosed a strategy to establish
40,000 remote jobs by 2030, with the
objective of creating jobs that enhance
its economy and don’t necessitate
physical in it.”
The UAE is taking several progressive
steps to boost the digital economy
sector in the country, with regional
governments establishing their own
initiatives in this field promoting
blockchain and Web3 technology.
These initiatives include the creation
of a blockchain task force within
the Ministry of Economy, and the
launch of a Web3 platform to support
the development of blockchain
applications.
Last July, the Dubai government
announced a plan to create 40,000 virtual
jobs by 2030 with the aim of creating jobs
that don’t require a physical presence
in the city, and to improve the city’s
economy by increasing tourism and
business activity. Additionally, Dubai
authorities announced plans to make
the emirate home to 1000 companies in
the blockchain and metaverse sectors,
contributing $500M to the national
economy.
Furthermore, the Abu Dhabi
Global Market (ADGM) is quickly
becoming a preferred destination for
digital asset companies, thanks to
its business-friendly initiatives and
supportive regulatory environment.
This is notably evident with companies
such as Coinbase, Circle, and Binance
all choosing to set up offices in the
region. On the other hand, Dubai Multi
Commodities Centre (DMCC) released
new data showing that out of 3,049 new
businesses registered in Dubai in 2022,
500 businesses were crypto start-ups,
indicating that the crypto industry is
growing in popularity in Dubai and is
likely to continue to do so in the future.
March 2023 www.thefinanceworld.com 79