2018 will be the year for cryptocurrency in UAE
Has the UAE entered the cryptocurrency market yet? Yes and no.
What’s for sure is that cryptocurrencies are a rising star aiming to rival classical monetary systems and a growing threat to printed currency.
In 2009, when Bit Coin made its way into the information superhighway, its value was around $0.00075. Where is it today? Try $2,500. According to Futurism.com, a site dedicated to future technologies and developments, the total market cap for all cryptocurrencies was slightly higher than $25 billion as of April 1, but 60 days later the cap exceeded $100 billion.
Dubai launches blockchain-based cryptocurrency.
On September 26 Dubai’s government’s economic website announced it had established a partnership to facilitate financial transactions through contactless payment.
“The partnership brings Emcredit, a subsidiary of Dubai Economy, and the UK-based Object Tech Grp Ltd together under the Dubai Economy Accelerators umbrella to develop and implement emCash, an encrypted digital currency, which people can use to pay for various government and non-government services,” it said.
“emCash will be the digital currency in emPay wallet, launched by Emcredit to support contactless payments. emPay allows UAE residents to make varied payments, from their daily coffee and children’s school fee to utility charges and money transfers, through the near field communication (NFC) option in their phones,” the statement added.
The statement said that with emCash, emPay users will benefit from secure digital currency and merchants will circumvent intermediaries and receive immediate payments in real time.
Ali Ibrahim, Deputy Director General of Dubai Economy, said emCash would accelerate Dubai’s evolution into a smart economy.
“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.”
e-wallet already in place
Emirates Digital Wallet (EDW), a platform established by 16 of the UAE’s leading banks, has announced “klip”, a vigorously market tested app that will help to replace physical cash in the pockets of UAE residents.
EDW said klip paves the way for cashless spending, transfer and storage of money for everyone living and working in the UAE.
It uniquely combines the adaptability and utility of smartphones with the familiarity of using cash in everyday purchases and payments.
Maki Vekinis, General Manager of the Emirates Digital Wallet, says: “This is not a new payments solution. It is a movement to create a cashless society where everyone wins – consumers at all levels, small and large businesses, banks, as well as the government. As a brand, klip promises to change everybody’s daily lives.”
The Chairman of the UAE Banks Federation, HE Abdulaziz Al Ghurair, said, “The launch of Emirates Digital Wallet .. has the potential to introduce a society-wide cash transformation to digital. It will provide a strong boost to the UAE’s effort to build an inclusive digital payments ecosystem that will benefit all stakeholders including consumers, businesses and banks, and set the path for the country’s transition to a cashless future”.
Certain aspects not quite ready
In mid September the Dubai Financial Services Authority cautioned that Initial Coin Offerings (ICOs) were not regulated and that no licenses are currently offered to firms within the Dubai International Financial Centre and as such warned prospectors about the dangers of rushing into this.
ICOs are similar to IPOs (Initial Public Offering) where stocks are offered to the public when companies are trying to raise money, but here digital money.
According to an October 2 Wall Street Journal (WSJ) article, ICOs are a new method of capital raising where tech start-ups create a new virtual coin or token and offer it for public sale.
“Firms raised a record $1.32 billion this way in the third quarter alone,” the paper said.
OneGRam, is a company in Dubai that uses blockchain technology to create a new kind of cryptocurrency, where each coin is backed by one gram of gold.
On its site, it said it had launched on May 2 an ICO as a new gold-backed, Sharia-compliant crypto-secured digital money.
What’s unique about this is that the Onegram is backed by actual gold held in vaults located within Dubai Airport’s high-security compound.
“OneGram can be used for digital payments, just like Bitcoin and other cryptocurrencies. When a OneGram Coin (OGC) is used for digital transactions, the transaction fees (minus admin costs) will be re-invested to buy more gold. Therefore, the amount of gold backing each OGC will increase with time,” the site said.
Will this open the floodgates despite the cautionary words? Who knows, but the technology is part of Dubai’s future.
Dubai has its eyes set on a smart future that encorporates this new technology.
“The fast paced environment and incredible willingness to adopt innovative technology has made Dubai the perfect place for us to do business,” said Muna Al Qassab, CEO of Emcredit Limited, in the same Dubai government statement.
“This project is a great example of the ambition we have met here, together we are essentially creating a whole new economic ecosystem.”
In April of this year, Aisha Bin Bishr, Director General of Smart Dubai, told WSJ: “We want to make Dubai the first blockchain-powered government in the world by 2020,”
“It is disruptive for existing systems, but will help us prepare for the future.”
The Smart Dubai office has pledged its support for the new currency platform.
It announced in March this year it would “educate both the private and public sectors about the potential of blockchain, and conduct workshops with key stakeholders, public and private, to identify which services can best be enhanced by blockchain and prioritize them for implementation.”
“It also will educate the public and private sectors about the technology’s potential. Once these efforts are finished, Smart Dubai predicts that the blockchain rollout will begin later this year as the public and private sectors collaborate on pilot projects,” it added in a a statement.
A connected and smart 2030
As part of the 2030 vision for Dubai, 25 per cent of transport will be driverless, will feature 3D printed Palm trees acting as intelligent posts for free wifi, and solar powered charging for portable devices like mobiles, tablets and others.
When the Abu Dhabi- Al Ain Hyperloop is built, people will travel at airplane speeds and hover electromagnetically toward their destinations, in minutes, not hours.
If Dubai can do that, it sure can digitise its business and financial platform in no time.