Is it becoming the cryptocurrency capital?

The world is confused about dealing with cryptocurrencies and it seems Dubai has found an opportunity.

Since the invention of the first, Bitcoin, in 2009, the market has grown to more than $ 2.3 trillion in size – or almost the annual GDP of all Arab countries – and decision-makers around the world are still unable to fall agree on a policy towards assets that were originally built to neutralize them.

They criminalize it in China and try to stop it in Russia for fear of its impact on the economy and its use for criminal purposes, but they embrace it in El Salvador and accept it in Germany and Singapore. In the United States, the opinions and actions of the Securities and Exchange Commission were characterized by conflicting opinions, sometimes satisfactory to one another and hostile to some to the point where other times they were sued.

In the Arab world, Dubai gave the region’s strongest signal this month that it is ready to join the allied minority with the crypto-asset market, or currencies built on blockchain technology.

“The Giant Event”

The Dubai government has announced that it has approved the Dubai World Trade Center as an integrated area supporting the regulation and oversight of virtual and encrypted assets, their products, digital exchanges and operators in the UAE.

The World Trade Center in Dubai will work with the private sector to build a legislative and oversight system for digital assets and to set standards for combating money laundering.

The government said this legislative framework includes digital assets such as cryptocurrencies, non-exchangeable tokens (NFTs) and other future products in the sector.

The next day, Binance cryptocurrency exchanger, the world’s largest trading volume, announced that it had signed a memorandum of understanding with the World Trade Center in Dubai to expedite preparations for a new hub for global virtual assets.

Naim Aslam, chief analyst at AvaTrade, a London-based cryptocurrency broker, describes the possibility of setting up Binance’s Dubai headquarters as a “giant event for the crypto business”. ANDsay “We think this is a big step towards a big change (for cryptocurrencies) … which is already booming in the Middle East and North Africa, especially in Dubai.”

Recent developments suggest that Dubai, in which Binance founder Changping Zhao owns a home, could be the incubator for the company’s headquarters. Currently, Binance, which was founded in 2017, does not have its headquarters, which makes it difficult to obey its laws, just like decentralized cryptocurrencies.

“We know Dubai is at the forefront in terms of technology adoption,” Aslam adds. “I think the legislative environment in Dubai is more conducive to crypto (business) than anywhere in the world … We have seen some crypto (business) relocate their headquarters there.”

There is no parliamentary system in Dubai that criticizes laws or can ban them like the United States, for example.

Proper legislation

Binance has faced some difficulties from authorities in several countries, including the United States, Britain and Japan. The founder of Binance Zhao is currently located in Singapore, one of the most crypto-friendly countries. However, the company’s office there recently withdrew its request to establish a Tadawul stock exchange, indicating the possibility of establishing the company’s headquarters in Singapore. it is done unimportant.

say Matti Greenspan, founder and CEO of Quantum Economics, a Tel Aviv-based crypto-research firm, told Zawya Arabic that “Binance is reluctant to choose a location for its headquarters for obvious reasons” due to the lack of appropriate legislation in most countries amid some concerns about cryptocurrency, including its use in illegal acts and its impact on the economy as a whole.

When the Dubai Economy and Binance Company was asked by the Arabic website Zawya about the existence of talks to establish the company’s headquarters in the Emirates via email, the former apologized for the comment, arguing that the matter fell outside its jurisdiction, and this i the latter did not respond. Zawya Arabic was unable to obtain comment from the World Trade Center in Dubai.

Only Dubai?

In the distant future, Binance’s presence in Dubai could contribute to the diversification of the Gulf economy, according to AvaTrade’s Aslam.

Indeed, on Monday, Binance announced that it had reached a preliminary agreement with the Central Bank of Bahrain to provide crypto-asset trading services, making another breakthrough in the region in a short period of time.

Bahrain was one of the first countries to adopt digital assets in the Middle East and the first in the Persian Gulf. In 2019, Rain was the first crypto-asset platform to receive a license in the region from the Central Bank of Bahrain.

“Given that the entire Middle East is booming with a large percentage of oil trading, chances are there will also be cryptocurrency-based trading. According to Aslam. “At the moment this possibility may seem very impossible, but it is certainly possible.”

Greenspan of Quantum Economics believes that by embracing Binance and cryptocurrency in general, Dubai is preparing itself “to become the world’s leading financial centers for decades to come.”

“The global economy is moving rapidly towards internet money, but most countries are slowly responding to this change.”

The report is the first in a series of reports on cryptocurrencies that will answer questions such as: Is technology the only major reason for Dubai to become the headquarters of cryptocurrency companies? What about Saudi Arabia and Egypt? Can Lebanon benefit?

(Prepared by: Sheriff Tarek, Sheriff works with Ahram Online and Africa Report, is also the editor-in-chief of Delta Digest and has previously worked for other media organizations, including the Los Angeles Times)

(Editing: Ahmed Nematullah, Ahmed has worked for several international and local newspapers and media agencies, including Bloomberg)

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# long analysis

© ZAWYA 2021

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