Cryptocurrency is the digital currency that the world is talking about. Digital currency has been around for a while now, it has not seen a lavish adoption in the way predicted from time to time. Modern businesses in the UAE are way ahead of their global counterparts. While UAE-based public blockchain company Arabianchain Technology is trading on some selective crypto exchanges as it has recently launched Dubai’s cryptocurrency, DubaiCoin (DBIX). Soon this DBIX will start its operations for in-persons as well as digital purchases in the city. How this Blockchain Technology is attracting businesses in the UAE? Are they openly adopting Cryptocurrency or have inhibitions, too? We will explore now, the current status of this digital currency, and what does the future hold for it.
What is Cryptocurrency
Cryptocurrencies are electronic or digital money. They conduct digital payment but are different from fiat currency (modern currency like cards, coins, banknotes, e-wallet like Google pay, Amazon pay). While fiat currencies are controlled, regulated by some regulatory authority(government, bank), cryptocurrencies are not. There is no central point that can control a cryptocurrency, but it uses cryptography which verifies transactions. These digital currencies cannot be hacked and other units (the new ones) can be further added only after the basic requirements are fulfilled.
The major advantage of Cryptocurrencies is that they do not face any central point of failure like a bank system faces.
Take one example. When you are transferring money to your friend (or anyone) using a bank transfer, it is vulnerable to certain risks, viz. the entire banking system failure due to technology breakdown, hacking, or issue of transfer limits. But in the case of cryptocurrencies, as there is no central system to control, there is no scope of threat or any sort of hacking and technological breakdown. There are varied types of cryptocurrencies and Bitcoin, Dogecoin is a few examples. The latest has been the Dubaicoin launched in Dubai.
Current CryptoCurrency Scenario
The launch of:
- Emirates Blockchain Strategy 2021
- Dubai Blockchain Strategy
The UAE government has recently adopted Blockchain technology and has launched the Emirates Blockchain Strategy,2021, as well as the Dubai Blockchain Strategy. The goal for launching these strategies is to manage administrative affairs. Through the Emirates Blockchain Strategy 2021, the government wants to introduce a big number of government transactions on some Blockchain platforms. On the other hand, through the Dubai Blockchain Strategy, the government wants Dubai to adopt Blockchain Technology on a full-fledged scale, making it one of the first cities to do so.
Global Blockchain Council
Dubai Future Foundation has established the Global Blockchain Council to explore digital transactions via Blockchain technology on a global scale. The council presently aims to see the efficacy of the current, and future applications for transactions. As per plans, the GBC will collaborate with varied financial & non-financial sectors and assist them to increase their productivity, efficiency, and dependability. And, understandably, the council stands in a very strong position in terms of deciding on crypto transactions, owing to its composition. The Council consists of government departments, leading private companies in sectors like banking, finance, and technology.
Launch of DubaiCoin
UAE-based Arabchain Technology, the Arab world’s first-ever public blockchain technology, has recently launched DubaiCoin. DubaiCoin happens to be Dubai’s first cryptocurrency. Dubai will control the price of DubaiCoin cryptocurrency and can be used for purchasing goods & services in Dubai. It is currently trading on some selective crypto exchanges, and since its launch, the price of DubaiCoin has risen to 1000 percent (source-Crypto.com)
As per a press release by Arabianchain Technology, “DubaiCoin will soon be able to be used to pay for a range of goods and services both in-store and online, with the clear intention for the coin to be used in place of traditional bank-backed currencies. Circulation of the new digital currency will be controlled by both the city itself and authorized brokers.” (source– cnbctv18 )
Popular Crypto Exchanges
- Bitcoin ATMs
Future of CryptoCurrency
Creative Zone, the largest & most popular, trustworthy business consultancy in the UAE has recently held a webinar. The discussion was about the prospects of Blockchain & Cryptocurrency towards shaping the future of the financial world. They came out with interesting conclusions. All they speak of the future of Cryptocurrency in the UAE are:
Banks will be Cryptofriendly
In the UAE there exist two types of Crypto worlds:
- An informal crypto world that independently operates and doesn’t fall within any regulatory framework. Banks are not willing to work with this type of Crypto entity. Because there is a high volume of crash risk.
- Another Crypto world contains entities that operate under some authorized regulatory framework. They are well regulated and offer transparency to their clients. Banks are receptive to these entities though it will take some time to make them accept the idea on an easy scale.
- ADGM, DIFC types of jurisdictions have introduced certain crypto regulations. The Central Bank of the UAE has already introduced a Virtual Asset Scheme.
- Various international organizations are stepping in to collaborate. This will facilitate digital currency, the Blockchain Technology to enter the realm of mainstream transactions.
Younger Generation Support
Although cryptocurrency is in a very nascent stage, the younger generation is very curious and interested to adopt this new form of digital currency. The main reason is the growing technology knowledge and skills amongst the younger lots who have also tried and tested the technology and gained some millions in returns.
Opportunities for StartUps
Yes, there are endless business opportunities for start-ups and aspiring entrepreneurs who need to start and educate themselves about various coins, smart contracts, decentralized finance as well as NFT (Non-Fungible tokens). All these things will promote cryptocurrency transactions by the start-ups, and the younger generation just does not want to waste time by going to banks (for account opening, etc.), rather, they want to do all the things on their phones opening a crypto-wallet and start banking.
You need to have some secured, protected form of crypto storage for keeping Bitcoins or any other cryptocurrency you buy. Investing in crypto like Bitcoin is not a small thing, and even securing it is a big deal. In the UAE, you can choose some popular hardware wallets such as Trezor or Ledger Nano S. As per sources, the best way to protect your cryptocurrencies/coins is by securing them in a cold storage hardware wallet only.
The UAE is already adopting Cryptocurrency though, at a nascent stage, the young generation is playing a prominent role in its promotions at a global level. Undoubtedly, the early adopters will have a definite advantage over their competitors in the market capitalizing on the maximum potential of it. Sooner or later, the UAE will see crypto being backed by assets like real estate or gold, and NFT will rule the market benefitting industries.