Exclusive: The UAE blockchain party is on and you’re invited
According to the reports published by Icobench, the UAE has been named the #1 country in ranking by amount of funds raised by ICOs.
In January and February 2019 alone, about $210 million was raised.
According to Gulf Business, Dubai developer Emaar Group announced on Monday March 11, 2019 plans to offer blockchain tokens for customers and partners by the end of this year, to be followed by an ICO in Europe.
The Emaar community token based on the Ethereum blockchain and the ERC20 token framework will allow users to access a referral and loyalty system and transfer it across the entire global Emaar ecosystem, including real estate, malls, hospitality, entertainment, and others.
This will be among the “first referral and loyalty tokens in the world giving access to an existing operational ecosystem of close to $10bn”, Emaar said.
How smart is the new blockchain thinking in the UAE?
Is Dubai moving fast enough with the regulatory environment needed to move Dubai into a blockchain-based financial economy in 2021?
“The Dubai government is a model to other governments on their forward-thinking regulatory thinking and speed of implementation. I believe they are on track for 2021,” Ziad Nassar, Co-creator @ Gozo Travel, told AMEinfo.
Musfique Ahmed, co-founder, Smart Crowd told this media that Dubai is the most innovative city/government in the world where visionary leaders are championing the innovation and technology agenda.
“To deliver a blockchain-based financial economy, the entire financial ecosystem needs to move ahead in unison, with close collaboration between land department, financial regulatory authorities and financial institutions. This will require commitment, investment and capability development. If Dubai can take the vision into reality, then the promise of a blockchain-based economy can propel Dubai into being the global centre of financial services and investment,” Ahmed said.
Are investors worried that end-users do not understand how a blockchain business with tokenized services works?
Part of the concern, like many new technologies is market education and understanding.
“We saw the same with the Internet where the younger generation was quicker to adopt and then later followed by their parents and then grandparents. The end-user does not understand, nor needs to understand the intricacies of online banking security, they need to be assured it is secure and they too are responsible to follow protocols, such as password complexity. The same goes for blockchain technology. The education phase from the end-user perspective is very important, as consumers start to become reliant on the technology,” says Nassar.
“Blockchain technology allows for more fluid transactions. The consumer wants to send money instantly for less, or transfer ownership, borrow funds and transact with escrow in 3 days instead of 30 days.”
For his part, Ahmed believes Investors, partners and end customers have developed a form of fear, apathy and disdain towards blockchain business.
“They often wonder if it is a scam or hype that is on the verge of collapse, particularly with the recent security breaches related to cryptocurrency,” he said.
What is the future ICOs in the UAE?
While Singapore and the UK continue to lead in the number of ICOs on the market, the UAE beat them this year when it comes to the amount raised.
The UAE raised a staggering $142 million constituting about 41% of the total amount raised by ICOs worldwide, in January 2019, according to icobench.
The UAE became the top country in this category due to a single ICO — the Genesis Crypto Blockchain Investment Bank aimed at building a fully compliant, crypto-friendly bank.
The Bolton Coin ICO in the UAE was responsible for their raising over $67 million, which accounted for 38% of all the money raised in February.
Earlier in the year, banks in the country announced an alliance with Saudi Arabia banks to launch a joint pilot cryptocurrency initiative to facilitate cross-border payments between banks.
“Regulation and Investors will determine the ultimate future of ICOs. We may see a combination of ICOs and STOs (security token offering) through IEOs (initial exchange offering), the capital raising and liquidity vehicle of the future,” clarifies Nassar.
Ahmed said hundreds of ICOs flooded the GCC over the past 18 months, “most of them without any viable business model proliferated by unscrupulous characters from far and wide, completely destroying any sense of trust.”
“However I do believe that this bitter experience will lead to the emergence of genuine ICOs that are based on sound business models and fundamentals. Once the business models are proven and trusted by the ecosystem of regulators, merchants and major institutions can then start to complement fiat currency with cryptos for major transactions such as real estate, and in particular, once crowdfunding /fractional ownership takes off in the region.