The UAE is no stranger to innovation and progress. And when it comes to blockchain and virtual assets, they’re staying ahead of the curve. With the goal of regulating virtual assets and becoming the ideal destination for the management and investment of virtual assets such as blockchain and cryptocurrency, Dubai recently adopted its first law to govern virtual currencies and assets, the Dubai Virtual Assets Law.
In this article, we’ll tackle some of the most important matters regarding virtual assets and blockchain strategy in the UAE and, specifically, Dubai.
What are Virtual Assets?
In the past few years, you’ve probably heard a lot about cryptocurrencies, blockchain, virtual assets, virtual currencies and more. But what exactly are they? Simply put, they are digital representations of value that can be traded online and, in certain cases, can be used for payment or investment purposes.
What is Blockchain?
Blockchain is a real time record book of anything that can be recorded. This includes financial transactions, contracts, physical assets, supply chain info and more. It is an open record where everyone can see the details of each “block”; however, the only person that can edit a block is the owner and upon changes, the entire blockchain updates in real time.
And why is blockchain valuable? Take a look at some of the benefits of virtual assets:
Benefits of Virtual Assets:
Easier, faster and cheaper than traditional payment methods
Provides alternative methods for those who cannot access traditional payment methods
Extremely secure
No withdrawal/purchase limits
No need to wait for bank hours, 24/7 access
However, we must be careful when dealing with virtual assets because there can be considerable drawbacks. Cryptocurrencies are a relatively new technology, and therefore the long-term effects of investment are unknown. In addition, the very concept of virtual assets can be difficult to understand and therefore result in negative investment results for newcomers.
What is the Dubai Virtual Assets Law?
The UAE has seen the opportunity to take advantage of the advances in blockchain with the creation of the Dubai Virtual Assets law, which will assist the emirate in its goal of attracting new forms of business. As the drawbacks of virtual assets can be significant if employed incorrectly, the Dubai Virtual Assets Regulatory Authority will be responsible for the governance, licensing and regulation of virtual assets within the region, looking to simultaneously attract new business and blockchain investors to Dubai and stay in line with local and international financial regulations.
But, what do the UAE and Dubai see in the future of blockchain technology? Take a look:
Tech giants like IBM and Microsoft are investing in blockchain technology; the average investment is $1 million.
90% of major European and North American banks are interested in blockchain technology.
Studies report that banks could save $8-12 billion annually with blockchain.
Blockchain has increased by more than 100% per year since its start in 2010.
The UAE and Blockchain
Check out two efforts spearheaded by Dubai to promote both blockchain and virtual asset investment in the region and use new technology to further the region’s blockchain innovation.
Global Blockchain Council
Started by the Dubai Future Foundation, the Global Blockchain Council was created to explore, research and organise blockchain usage in the region and connect financial and non-financial sectors to increase efficiency and reliability. This council, made up of 46 members from a wide range of sectors, will seek out ways to adopt blockchain technology in Dubai.
Road and Transport Authority Blockchain Project
One of the most attractive features of blockchain is its transparency; the Dubai Roads and Transport Authority is working on a lifetime management system for vehicles with the goal of providing the wide range of people who deal with vehicles (manufacturers, sealers, buyer and sellers, insurers and garages) a clear and transparent history of the vehicle to prevent disputes, place trust in transactions and lower the cost of services.
Above all else, Dubai is committed to maintaining its status as a leading and innovative region, providing attractive and unbeatable business opportunities to investors from around the world. If you’re interested in learning more about blockchain technology companies in Dubai, contact us here.
Written by
Adrian Oton
CEO, Europe Emirates Group
