UAE to see rapid growth in crypto activities

The UAE will see rapid growth in crypto activities, Sandhya D’Mello predicts in Khaleej Times. Meanwhile, the Abu Dhabi Global Market (ADGM) has already 11 fully licensed and approved in-principle virtual asset players in its community.

The UAE known to be at forefront of innovation and emerging technologies will witness more global players descend on the desert to set up their operations in cryptocurrency and its related activities giving investors a wider choice to choose the exchanges.

With top global names like Binance and Bybit already making a regional presence, the investor sentiment is surely at a peak with the nation witnessing disruptive investment options.

The Abu Dhabi Global Market (ADGM) has so far 11 fully licensed and approved in-principle virtual asset players in its community.

“Since ADGM introduced its virtual assets guidelines in 2017 and launched the world’s first fully comprehensive virtual assets regulatory framework and regime in 2018, we have seen a growing number of local, regional, and global players anchoring their presence and providing virtual assets activities and related services in Abu Dhabi, the UAE, and across Mena. This, in turn, attracted a heightened level of retail and institutional investors’ interest and investment. In addition, ADGM has also earlier introduced its regulatory sandbox and fintech Digital Lab to encourage and assist fintech firms in testing their products in a “live” environment, and also to ensure that its fintech firms understand and comply with the UAE’s rigorous AML and KYC compliance standards,” said ADGM spokesperson.

Currently, ADGM is also seeking market feedback on its proposed enhanced virtual asset framework and allowing regulated multilateral trading facility (MTF) or custodian groups within ADGM to conduct non-fungible token (NFT) activities. “Over the years, the UAE has also doubled its efforts to provide a supportive environment and regulatory framework for digital assets and blockchain, prioritizing bringing virtual assets activities and investment to the UAE and advocating the innovation and adoption of blockchain. Such strategic and collective efforts have drawn in new players and more investors to the UAE and the wider region,” added the ADGM spokesperson.

Recently, The Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) has issued a discussion paper on DeFi, in order to engage with industry practitioners and other stakeholders to explore the potential opportunities arising from decentralized finance (DeFi), associated risks and what a future regulatory framework may resemble.

Emmanuel Givanakis, CEO of the ADGM FSRA said: “DeFi is an emerging part of the global financial ecosystem that holds the promise of delivering more efficient and tailored financial services. In order to achieve this potential, the risks arising from DeFi must be identified and appropriately addressed. We are pleased to contribute our views on DeFi and its potential future direction to the ongoing discussion in the community, in association with industry practitioners. We also look forward to collaborating and starting a dialogue with the industry that will help us make informed policy choices to address these risks and thereby realize the potential benefits of DeFi and any future regulatory developments.”

Toluna, an international online market research company, conducted a global study to understand consumers’ perceptions around cryptocurrency and interviewed 9,000 people between the ages of 18 and 64 from four regions and 17 countries, including the UAE.

The study showed that the overall outlook for investing in cryptocurrency in the UAE is much stronger compared to global markets. Almost 78% of investors are expecting to increase the proportion allocated to investible assets for cryptocurrency investment in the UAE against 67% in global markets.

The local market is also growing at an unprecedented rate as 16% of all company registrations in DMCC (Dubai Multi Commodities Centre) in Q1 2022, were for crypto-related activities. The number of companies in the Crypto Oasis ecosystem edge closer to the targetted 1,000 before Q2, 2022.

It is reported that this year alone estimates of venture investment into the sector across the GCC will exceed $500 million. Currently, the digital economy contributes about 4.3% of the GDP in the UAE, which is equivalent to Dh100 billion ($27 billion), according to the latest statistics from the Dubai chamber for Digital Economy.