Dubai Aims to Be the World’s Crypto Hub
With its ambitious goals and deep financial pockets, it’s no surprise that Dubai means business.
By TKS |
September 22, 2022
As crypto moves further away from the days of bitcoin being used solely for black market transactions, more and more cities are starting to invest in this exciting new digital currency industry.
From setting up crypto exchanges to creating a global crypto ecosystem, Dubai has big things in store. With its ambitious goals and deep financial pockets, it’s no surprise that this city-state is firmly on the map regarding cryptocurrencies and blockchain technology.
Dubai’s Rising Interest In Crypto
Crypto firms and blockchain startups are taking advantage of the emirate’s favorable crypto regulations by setting up offices and moving their operations to the wealthy Gulf state.
According to a 2022 report by the crypto exchange company Gemini, crypto startup firms invested more than $10.5 billion in the sector, which is the driving force behind Dubai and its plan to become the world’s crypto hub.
Public sentiment towards digital currencies is also favorable in The United Arab Emirates. The same report revealed that the UAE has a cryptocurrency adoption rate of 35%, with almost half of the population (47%) believing that crypto is the future of money. Additionally, 33% of the UAE’s crypto owners use digital currencies to make in-person purchases at physical, brick-and-mortar shops.
This is no surprise, as Dubai has always been keen on making it easier for its residents to spend their digital coins.
Virtual Assets Regulatory Authority (VARA)
While some countries crack down on cryptocurrency regulations with a heavy-handed approach, the UAE is it’s advocate. They’ve created the Virtual Assets Regulatory Authority (VARA), a regulatory body that grants virtual asset licenses and oversee the country’s burgeoning blockchain and cryptocurrency industries. Their goal is to attract crypto-based businesses to the region and pave the way for widespread adoption.
Crypto firms are taking notice, too, and an increasing number of crypto startups have relocated their operations to Dubai.
The crypto exchange Bybit recently closed its Singapore operations, opting to settle in Dubai, where they will benefit from VARA’s favorable regulations.
“I believe we could help further stakeholders’ understanding of this complex industry as the virtual assets space rapidly matures. This in-principle approval is an extraordinary opportunity for Bybit to support the UAE and the wider region’s ambition to become a global virtual assets technology hub,” co-founder and CEO of Bybit said.
VARA recently granted a virtual asset license to Binance, the largest crypto in the world by trading volume.
Binance’s Richard Teng stated, “It is a very progressive framework, and we are very happy to be part of that process, working very closely with the Dubai government. I wish more regulators globally adopt this approach that Dubai has – a public-private sector partnership.”
Furthermore, crypto exchange heavy-hitters Kraken, FTX, and Crypto.com all have received VARA licenses and are planning on opening up regional hubs in the UAE.
Dubai and the Metaverse
Dubai’s crypto plans aren’t just terrestrial—it has big plans for the metaverse. In a statement released by VARA, it will use The Sandbox platform to acquire virtual land to build the VARA MetaHQ, its metaverse headquarters. Its purpose is, “…to help international regulatory bodies and cryptocurrency service providers work together more effectively.”
According to Dubai’s website, “As the world’s first regulator to make its debut in the Metaverse, VARA seeks to ensure that the regulator is accessible to its industry in their environment, and facilitate collaborative engagement between global Virtual Asset Service Providers (VASPs), Industry Thought-leaders, and International Regulatory Authorities.”
There’s no question that Dubai is all-in on becoming a one-stop destination for all things cryptocurrency. As the global regulatory landscape begins to shift, Dubai is leading the way with its forward-thinking approach. From setting up crypto exchanges to creating a global crypto ecosystem, Dubai makes big plans to dominate this new and exciting industry. This is a massive opportunity for investors, as the city-state has the potential to grow and prosper in this rapidly-growing sector.