Cryptocurrencies and in particular Bitcoin have made headlines around the world, but there is still a lack of understanding of exactly what they are. Dubai recently hosted the AIBC Summit to address this gap in knowledge.
In simple terms, cryptocurrencies are virtual, unlike a euro or a dollar that we can hold physically. They are generally not tied to a bank or government and allow users to spend money anonymously via a series of complex transactions using blockchain technology.
Around the world, some businesses accept crypto as a means of payment, but general public acceptance is still limited, something Dubai is keen to change. One of the first steps was the launch of the DMCC crypto centre.
Dubai’s DMCC opens its new Crypto Center for crypto and blockchain businesses
The DMCC Crypto Center aims to be a platform for the development and application of crypto and blockchain technologies.
Located in the Almas Tower, the DMCC Crypto Center offers co-working spaces for all types and sizes of crypto businesses, from companies developing blockchain-enabled trading platforms to companies offering, issuing, listing and trading crypto assets.
To set up the new Crypto Center, the DMCC has partnered with CV Labs, which helped create Crypto Valley in Switzerland.
The @dmcccrypto is now open with co-working spaces & a range of programmes for crypto entrepreneurs and SMEs in #crypto business, #blockchain-enabled trading platforms, and to firms offering, issuing, listing, and trading crypto assets. https://t.co/0aBpZD94LI pic.twitter.com/nUVGOavMwl
— DMCC (@DMCCAuthority) May 24, 2021
Regulation is always a burning issue for cryptocurrencies. Together with the Securities and Commodities Authority (SCA) of the United Arab Emirates, the DMCC is helping to create a regulatory framework. All activities within the free zone that include the exchange of crypto assets will be regulated by the SCA.
In May this year, the Dubai Airport Free Zone Authority (DAFZA) also signed an agreement with the SCA to support the regulation, offering, issuing, listing and trading of crypto assets within the free zone.
The agreement allows companies trading with crypto assets to obtain a licence within the DAFZA free zone.
UAE to issue its own digital currency “Govcoin”
With the rise of unregulated cryptocurrencies, the Central Bank of the United Arab Emirates has announced that it will issue its own digital currency.
The CBUAE’s decision is part of its 2023 to 2026 strategy, which it says “seeks to position it among the top 10 central banks in the world”.
In its announcement, the CBUAE said its strategy includes seven objectives, including issuing digital currency – known as CBDC or Govcoins – and driving digital transformation in the UAE’s financial services sector using the latest artificial intelligence and big data solutions.