Dubai becomes a haven for crypto enthusiasts

    16 Oct 2021

    Dubai government has remained crypto-friendly to promote investment in the sector. With no capital gains tax and ease of buying and selling anonymously, Dubai makes life easy for crypto investors. Lack of tax on income or capital softens the anti-money-laundering laws in the emirate.

    Dubai, a prosperous city in the United Arab Emirates (UAE), might be one of the best places for crypto enthusiasts looking to live on digital currencies, local sources told BeInCrypto.

    “With no capital gains tax, ease of buying and selling crypto anonymously and spending with cash makes life very easy for an enthusiast in Dubai,” said an anonymous source. “Compared to most industrialized countries, I would say that Dubai is one of the easiest and best places to come and realize and spend crypto gains. Being able to buy property and cars directly for Bitcoin is very unique and in many Western countries not even possible.”

    One of the things that make Dubai and the UAE an attractive crypto destination is the simplicity of converting Bitcoin and most other cryptocurrencies into cash with low fees while remaining almost anonymous. Exchanges generally require basic know-your-customer (KYC) identity and nothing more, the source added.

    For instance, in the case of Cointral, a Turkish-owned exchange with an over-the-counter (OTC) desk in Dubai, the source said during an interview, “you just walk in and trade on the spot.” Cointral charges a general fee of 3%, which looks pricey, but “there are also many local dealers you can find to make low to high volume peer-to-peer (P2P) trades with fees around 1%.”

    Online exchange BitOasis, based in the UAE, offers similar OTC services, allowing “people to buy and sell with local bank transfers,” the source said. Although, cryptocurrency use in Dubai is so fluid that the central government has adopted deliberate strategies to advance mainstream usage.

    Kiklabb, a government-owned entity in Dubai, in February began accepting Bitcoin, Ether, and Tether as payment for its services. Kiklabb is a free trade zone that helps companies to set up shop in the emirate. Kiklabb issues trading and other licenses as well as Visa processing. It also leases office space to its customers on-board the Queen Elizabeth 2 cruise liner, anchored at Port Rashid. Payments for these services can now be made in Bitcoin.

    In the words of Tasawar Ulhaq, CEO of Kiklabb, crypto-based payments allow for more accessibility for global entrepreneurs looking to start a business in the UAE. “Cryptocurrencies are the payment method of the future,” he claimed.

    Dubai has generally remained crypto-friendly, allowing investors to buy, sell, or hold digital assets at zero taxes – something that seems completely intolerable to most world governments that are pushing new regulations on Bitcoin. The UAE’s real motivation tends toward facilitating increased investment within the local crypto industry.

    Dubai and UAE don’t have any tax on income or capital, rendering the anti-money-laundering laws very relaxed, the source said. Cryptocurrencies are neither illegal nor recognized as legal tender in the UAE. Banks may question the source of funds when conducting transfers, but generally it’s no questions asked up to very high volume.”

    The idea of laissez-faire economics still holds true in Dubai, particularly concerning cryptocurrencies. The majority of people there, both locals and foreigners, “generally use Bitcoin and crypto as speculative vehicles or for remittances. There are several property dealers, car dealers, and even visa agents that accept Bitcoin as payment. There is demand from people coming from abroad with money to spend.”

    According to recent reports, the UAE is planning to use blockchain technology for 50% of government transactions this year. The Dubai Future Foundation estimates that the country could save more than $3 billion through blockchain and crypto use.

    Recently, Dubai Economy has signed an agreement with leading licensing authorities, such as Dubai Silicon Oasis Authority, Dubai Multi-Commodities Center, and Dubai Airport Free Zone Authority, to participate in the Know Your Customer Blockchain Platform through the Unified Business Registry Platform. It will facilitate faster and more secure customer onboarding and allow sharing of verified e-KYC data between authorities and financial institutions.

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