The Dubai Multi Commodities Centre (DMCC) has revealed that cryptocurrency enterprises accounted for 16% of new firm filings in the first few months of 2022. The increase in crypto-related filings corresponded with a period in which the DMCC achieved the ‘best Q1 result’ ever since its founding.
What does it mean for the cryptocurrency and blockchain space in general? Will it impact the crypto landscape worldwide? Let’s find out.
Launch of DMCC Crypto Centre – The Catalyst?
The Dubai Multi Commodities Centre (DMCC) is one of the UAE’s major free trade zones. It reported cryptocurrency and blockchain enterprises accounted for 16% of new filings in 2022’s first few months.
The existence of the DMCC Crypto Centre, inaugurated in May 2021, is also ascribed to the increase in crypto and blockchain enterprises entering the free zone.
DMCC released a statement in which its CEO and Executive Chairman, Ahmed Bin Sulayem, stated, “the rise in the number of new registrations by crypto firms came during a quarter that has been named the highest Q1 performance since 2002 inception.” According to him, this new development will make the free zone a world-leading destination for business.
The global economic environment remains tough. However, Dubai’s position as a world-leading destination for foreign investment is stronger than ever, and DMCC is at the core of this worldwide charm.
Registering such a high number of new firms in a short span is a DMCC record, demonstrating the enormous potential available when entering the Free Zone in Dubai.
Sulayem said that the DMCC would continue its efforts to recruit ambitious enterprises wishing to establish themselves in Dubai.
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NFTS and the Metaverse
“Artists such as Amrita Sethi and Sacha Jafri are leveraging NFTs to create immersive experiences and transfer their creativity into new channels and are now able to overcome limitations of time and location and enhance their engagement with audiences across the globe,” says Saqr Ereiqat, co-founder of Crypto Oasis.
Non-digital traditional businesses have started launching metaverse projects. The Dubai government has revealed ambitions to build a virtual version of the UAE in the metaverse, with applications in entertainment and education.
DAMAC Properties, a property developer, is already trying to establish a metaverse initiative, and UAE Post has been issuing NFT postmarks.
Ereiqat feels that recent changes have simplified trade and the utilization of crypto in the UAE. But he admits that there is a long journey to go on till widespread acceptance.
Abdullah Ghandour, CEO of Empire Token, revealed intentions to have all decentralized finance (DeFi) platforms meant to unify tools and apps for swaps, trading, and communication in March 2022.
According to him, the UAE’s establishment of a specific agency for the legislation of cryptocurrency markets available today demonstrates the country’s commitment to becoming a top player.
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Will They Accept Payments With Crypto?
“The UAE has several advantages as a location for crypto and blockchain activity because it is a hub for business,” says Ghandour.
“We will soon see crypto being accepted as a form of payment in a country that is already developed and advanced.
“The UAE’s geographical location between Asia, East Asia, the Middle East, and Europe makes it easier to attract blockchain and crypto investors and the prosperity of the country is a further attraction.”
Bill Hughes, the director of global regulatory matters at ConsenSys, agrees that the UAE’s long-term sustainability will depend on whether the majority of the legislative community considers its measures for illicit funding to be sufficiently adequate.
Can UAE Become the Hub for Crypto?
“If the controls are too lax and disreputable businesses flock to the country, there are mechanisms through which to cut off the UAE crypto market from the rest of the financial system,” Hughes says.
“That would make it decidedly less attractive to most players in the crypto market.”
Zennon Kapron, managing director of consultancy company Kapronasia, thinks that the Emirates must tread carefully between applying too much regulation and stifling growth and fostering a free atmosphere that risks flouting global standards and practices. Kapronasia is a fintech-focused strategic firm.
“Many crypto players that have been unsuccessful in other jurisdictions like Singapore are playing a game of regulatory arbitrage and moving to jurisdictions such as the UAE where the regulations seem to be easier,” he says.
“Whether it is the UAE or Singapore that has the right standards and requirements in place remains to be seen.”
However, the soaring cryptocurrency prices near all-time high levels are attracting attention to the markets. The continued returns will create a higher cryptocurrency value in the future, which is a big bet that the UAE is taking.