In the last few turbulent months, Dubai has become a major contender in becoming the official crypto capital of the world.
Following a clear and robust regulatory framework around digital assets, many prominent digital asset players have opened their offices in the emirate. Dubai’s Virtual Asset Regulatory Authority (VARA) has granted minimal viable product (MVP) licenses for cryptocurrency market participants, such as the leading exchange Binance and the custodians Komainu and Hex Trust.
In addition to the Virtual Asset License scheme that enables crypto companies to extend their services to qualified investors in the emirate, participants of the MVP program are granted full operation under VARA’s oversight. Most importantly, the rules in Dubai’s regulatory framework are clear, not overly strict, and leave much room for innovation, welcoming cryptocurrency startups to thrive.
Considering all the above, it shouldn’t be surprising that Dubai has hosted hundreds of crypto events and conferences this year.
Now, let’s look at the key trends, initiatives, and events in 2022 that have all contributed to Dubai’s astonishing progress in becoming crypto’s capital.
Dubai’s Massive Inflow of Crypto, FinTech, and TradFi Enterprises
Binance, Komainu, Hex Trust, OKX, Crypto.com, and several other major crypto companies have relocated their headquarters or opened new offices in Dubai to serve the Middle East region. One of the latest players to join is the digital asset investment firm Q9 Capital, which recently received a provisional license to operate in the emirate.
However, the massive inflow of crypto firms is only a part of a bigger trend that has been rising in the emirate in the past few months. As many see it as the “newest hotspot” for hedge funds, Goldman Sachs is moving more of its senior bankers to Dubai, and Citigroup has been doing the same in recent months. At the same time – just like crypto firms – numerous large TradFi companies, like the derivatives provider MultiBank Group relocated their headquarters to the emirate.
Interestingly, fears of a global recession, rising rates of inflation, and ongoing supply chain issues didn’t have much of an impact on the above trend. While the number of multimillionaire citizens has increased by 18%, the Dubai International Financial Centre’s (DIFC) FinTech industry is booming as its fastest-growing sector. Already the home to 17 of the world’s top 20 banks, the DIFC reported an 11% surge in new company registrations in the first half of 2022, featuring a 22% year-over-year growth in financial and innovation firms operating there. Moreover, the UAE hosts nearly 1,500 active Web3 organizations with almost 7,000 individuals. Among these companies, there are a lot of MENA and Muslim community-focused initiatives, e.g., Islamic Coin — а Haqq blockchain-based halal asset built to boost the inclusion of the global Muslim population into the modern banking system.
The Dubai Metaverse Strategy and Regulatory Updates
Recent governmental initiatives have significantly contributed to the progress of the emirate’s mission of becoming the next big crypto hub on the globe.
In late November, Dubai Crown Prince Sheikh Hamdan bin Mohammed approved a new phase of the emirate’s metaverse strategy. Introduced in July, the program seeks to embrace innovation and the crypto industry’s emerging tech to add $4 billion to the local economy and create 42,000 new virtual jobs by 2030.
The four new strategies of this newly-approved stage aim to study how the government can provide services through the digital realm and what social benefits citizens can realize from metaverse services. Roughly a month earlier, Multiverse Labs launched a new metaverse city in the United Arab Emirates as part of a government-backed initiative. In late September, the UAE Ministry of Economy announced the opening of its new, virtual world-based headquarters.
In terms of regulation, Dubai has recently introduced new crypto marketing rules to safeguard investors. At the same time, the Dubai Financial Services Authority (DFSA) broadened the range of tokens that can be utilized in the DIFC special economic zone.
What Were the Key Crypto Events in Dubai This Year?
In 2022, Dubai served as a primary location for hosting crypto, Web3, and blockchain events, meetups, and conferences.
As a key highlight, under the patronage of Dubai’s ruling family member HH Sheikh Juma Ahmed Juma Al Maktoum, the 22nd World Blockchain Summit returned to Dubai in October after a conference in March. One of the most extensive series of industry events, it connected over 20,000 crypto influencers, investors, entrepreneurs, and decision-makers, including Binance’s Changpeng Zhao, Cardano’s Charles Hoskinson, and Polygon co-founder Sandeep Nailwal. Interestingly, Dubai is set to host another WBS conference in March 2023.
Like WBS, Crypto Expo held two large digital asset industry conferences in Dubai throughout the year, with plans to return to the emirate in March 2023. In addition to panel discussions with industry experts, the event series features a prestigious award ceremony and an expo with over 100 cryptocurrency firms, as well as 10,000 traders and investors from more than 30 nations.
On the Way to Becoming the World’s Crypto Capital
Through a friendly and robust regulatory framework and a series of government initiatives this year, Dubai is on the road to becoming the world’s crypto capital.
As the local government has taken a bold step towards adopting emerging technology and the metaverse, Dubai hosted hundreds of industry events. It started a rising trend in which major digital asset, FinTech, and TradFi firms moved to the emirate.
For these reasons, it’s safe to conclude that Dubai had an excellent year in crypto, even amid the current bear market and adverse macroeconomic conditions.
