Cryptocurrencies: Blockchain and bitcoin in Dubai
Dubai may be a growing hub for cryptocurrency development as it boasts of its creation – the world’s first sharia-compliant crypto-coin and EmCash, but much of its positive impact hasn’t been widely known. And this is likely due to regulations around cryptocurrencies only coming into effect in January 2018. As such, stakeholders within the industry as well as the general public would need to keep their eyes on upcoming initiatives alongside changes in the market with the implementation of these potential regulations.
What does Dubai hope to achieve for Blockchain by 2020?
The Dubai Blockchain Strategy
There are three focal points to Dubai’s Blockchain Strategy. Firstly, the aim to improve government efficiency by on-boarding 100% of government transactions to a Blockchain network. This will in turn improve governmental operations and Islamic banking by moving inter-governmental paperwork onto Blockchain through a new local start-up called ArabianChain.
Secondly, Dubai hopes to strengthen industrial activity through the creation of a new Blockchain-based business model. And thirdly, this strategy is geared to secure Dubai’s global lead in terms of adoption and implementation of Blockchain networks and transactions.
Additionally, the Blockchain strategy would not only fully digitise government operations in Dubai but also create thousands of new tech and business opportunities. With this, the nation is hoping to reduce the cost of resources and document processing by AED $5.51 billion. In terms of manpower resources, Dubai will need to ensure sufficient availability of trained manpower to support the increasing implementation of Blockchain in the near future across government as well as private sectors. And this is especially crucial with the current shortage of object oriented programmers and developers globally.
“The UAE represents a progressive view in Blockchain adoption, and serves as a great example for other governments around the world. We look forward to creating new business opportunities and partnerships, thereby advancing global adoption of Blockchain technology” said Perianne Boring, the founder of Chamber of Digital Commerce.
Dubai has adopted an aggressive program of innovation within Blockchain and IoT at a state infrastructure level over the past few years, with multiple international partnerships that would help to make the 2020 Blockchain deadline come to fruition.
EmCash – Dubai’s own Blockchain currency
Dubai’s government is said to develop and implement EmCash, an encrypted Blockchain-powered digital currency that will enable citizens to use in their payment for services. EmCash reduces fraud, as well as inflation, since the currency is issued in real time, based on actual demand.
The digital currency will be developed with a partnership with Emcredit, a subsidiary of Dubai Economy and UK-based Blockchain start-up ‘Object Tech’. Dubai Economy is also the government body responsible in planning and implementing the economic agenda of the emirate of Dubai.
An announcement adds – this digital currency will be based on Blockchain technology that will allow UAE residents to use the digital currency via an EmPay wallet application on their smartphones. The Blockchain deployed “allows for shared ledgers so that control over payments is not limited to any single member in the EmPay ecosystem and transactions are recorded instantaneously,” explained Muna Al Qassab , CEO of Emcredit Ltd.
EmPay will allow UAE residents to make varied payments, through the near field communication (NFC) option in their phones. With the option of a secure digital currency, merchants would also be able to receive such payments in real time without going through intermediaries, saving both time and cost.
“A digital currency has varied advantages – faster processing, improved delivery time, less complexity and cost, to name a few. It will change the way people live and do business in Dubai, and mark a giant leap for the city in harnessing game-changing innovations to improve ease of business and quality of life,” mentioned Ali Ibrahim, Deputy Director General of Dubai Economy.
Greater Financial Inclusion in the Middle East
As with the above mentioned initiatives, digital innovation coupled with high mobile penetration rates in the UAE creates opportunities to reshape the region by tapping onto an estimated 85 million unbanked adults. And this is especially for those aged 25 and under.
According to the World Bank Global Findex Database, UAE had a mere 14% in terms of global financial inclusion. This includes individuals without access to even the most basic financial services. As such, companies within the financial technology sector see a critical opportunity that exists for innovation in banking.
One of the biggest opportunities for Dubai is the presence of women in the field, said IBM. In 10 Arab countries surveyed by UNESCO, women graduating in STEM subjects represented 34% to 57% of graduates—much higher than the Western world. On top of that, 35% of internet entrepreneurs in the Arab world are women, compared to 10% worldwide. This shows that the UAE is a region that has many opportunities, especially in the search for talent within technology where women are able to start and advance their careers.
27.5% of women who make up the UAE cabinet play key roles in supporting technology and innovation in the country. In the UAE, women are not a stark minority in the technology sector—they’re a part of all the major tech initiatives and, in many instances, leading them. Ultimately, UAE will need to take advantage of all available resources in its race to attract both Blockchain talent and organisations, to maintain its position as a financial hub in the region. The development of the sector in Dubai has also led the UAE to consider updates to be made to the existing regulatory framework surrounding Blockchain technology by 2018. This will hopefully provide greater transparency over transactions and activity on the platform.
If you’re interested in how the landscape for the sector is evolving or if you’re looking for talent with specific skill-sets, do connect with Jiten Sharma on LinkedIn or visit our LinkedIn page for more industry insights.
Source: Cointelegraph, CNBC, Oxford Business Group, Khaleej Times, Cryptocoinsnews.com, Arabian Business, QZ.com