Embracing the future: Dubai’s new crypto law is a milestone in the journey of regional economics

Op-ed by Hisham Al Gurg, CEO, Seed Group and the Private Office of Sheikh Saeed bin Ahmed Al Maktoum

Cryptocurrencies are not an unfamiliar subject. From college students to veteran politicians, everyone has some idea about what these virtual currencies are and where they fit into the global fiscal dialogue. Digital currency is perhaps one of the most talked-about financial topics of our time.

Paul Vigna, a market reporter for the Wall Street Journal and an acclaimed author, has profoundly described the journey of cryptocurrencies and the intricacies that define their concept, existence, and future. Talking about why they are important financial assets, he mentions it in his book titled The Age of Cryptocurrency: How Bitcoin and Digital Money Are Challenging the Global Economic Order, “We have an opportunity to reform the financial system, to turn it into the public utility that it’s supposed to be — a level playing field that everyone can indiscriminately use in their bid to get ahead. Let that be the standard for the coming age of cryptocurrency.“

Many digital gurus, businessmen, and visionaries, like Paul, have widely spoken and written about the implications that crypto is associated with, and as a result, authorities and governments all over the world have been slowly but steadily finding ways to embrace the future of financials, even if it means defying age-old methods and systems that we have all been familiar with for many decades.

However, embracing it is not a step for the faint-hearted. Only a handful of governments and/or authorities in the world right now are leading the way in legalising the use of cryptocurrencies and setting up permissible methods to make crypto transactions safe and fool-proof. It makes me deeply proud that I am from one such city in the world that has a visionary government and farsighted leaders who have taken the first and very important step in this direction.

Last week, when I read the tweet by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of Dubai and Ruler of Dubai, announcing the establishment of the Dubai Virtual Assets Regulatory Authority and formally approving a crypto asset law, I couldn’t help but analyse how this move will lead to a stronger digital economy in the emirate and how it will cement Dubai’s position as a key player in designing the future of digital assets in the UAE, the region, and beyond.

A regulatory framework or consultation paper titled “Regulation of Crypto Tokens” issued by the Dubai Financial Service Authority offers insights into the regulations one can expect, information about average trading volumes, and all the supporting systems in place to begin trading cryptos in Dubai.

Talking about how it intends to make the digital assets safe, it mentions, “There are currently more than 2500 Crypto Tokens (and growing) traded in mainly unregulated markets today… we consider that there needs to be some constraints in respect of what types of Crypto Tokens can be permitted, in order to prevent potential higher-risk activities relating to illiquid or less mature Crypto Tokens, at least at the beginning of this regime, until we become more familiar with the different types of Crypto Tokens and their operations.“

The UAE has already been known for its support of innovation—it is, after all, the first nation in the world to have appointed a Minister of State for Artificial Intelligence. And now, the adoption of the first law meant to regulate the operations of cryptocurrencies and digital assets in Dubai is a milestone step that will define the future of regional economics.

Concrete steps in this direction were taken early in time. In 2018, the UAE Blockchain Strategy 2021 was launched with the goal of conducting 50 percent of government transactions using blockchain technology. As per data by UNESCO in 2020, there were over 60 AI-driven companies in the UAE and there were plans to open more than 73 robotics labs in schools across the UAE.

It is for this reason that world leaders like Bill Gates, the founder of Microsoft, have called digital currency the future of money. And this recent step by Dubai is a big leap in the direction of this future.