Hossam Abdelnaby (Abu Dhabi)
The UAE plays an important role at the global level in shaping the future of finance through blockchain technology and cryptocurrencies, according to a study issued by Heriot-Watt University Dubai.
The study confirmed that the future of blockchain and cryptocurrencies in the country is bright and an incubator for innovation, at a time when the country is emerging as a leading force that is actively adopting blockchain technology and cryptocurrencies as the global financial landscape transforms.
The study indicated that the UAE's strategic initiatives and regulatory frameworks make the country a global leader in embracing and shaping the transformative potential of blockchain technology and cryptocurrencies, while increasing its ability to deal with challenges and seize opportunities to redefine the future of finance through innovative technologies.
Change of scenery
The study confirmed that blockchain technology, a decentralized system on which cryptocurrencies are based, has emerged as a tool to change the landscape in the financial sector, as its ability to provide transparency, security and efficiency has led to a reduction in the adoption of traditional financial models and opened doors to innovative models.
She explained that according to Fortune Business Insights, the global blockchain market is expected to witness significant growth, rising from $17.57 billion in 2023 to an estimated $469.49 billion by 2030, and this prediction indicates a remarkable compound annual growth rate (CAGR). It reaches 59.9% during the expected period, noting that the UAE has realized the potential of blockchain, and has positioned itself as a leader as a center for innovation in the fields of blockchain, as the forward-looking approach followed by the government is evident in its various initiatives and partnerships that aim to harness the full potential of this revolutionary technology.
Adopt encryption
A Heriot-Watt University Dubai study showed that cryptocurrencies have become the most famous application of blockchain technology and an integral part of the financial scene, especially after Bitcoin gained widespread acceptance as a store of value, while paving the way for the capabilities of smart contracts provided by Ethereum. The path to decentralized applications, predicting that the value of the worldwide cryptocurrency market will reach $71.7 billion by 2028.
The study reported that the adoption of cryptography in the UAE is increasing, and according to Statista’s expectations, the user base of cryptocurrencies in the UAE market is likely to reach 3.15 million users by 2028, attributing this to the government’s supportive stance, which fosters an environment that encourages innovation while ensuring regulatory clarity.
She added that Dubai is leading crypto-friendly initiatives in the country, as the Dubai Multi Commodities Center launched the Crypto Centre, as the first business center in the world for crypto and blockchain businesses that provides a platform for emerging companies and existing companies to flourish in an environment that promotes cooperation and innovation, pointing out that a recent report issued About Recap, a cryptocurrency tax software, ranked Dubai as the second most cryptocurrency-ready city in the world, with more than 770 companies in the cryptocurrency sector. Dubai also established a dedicated digital asset regulatory body, known as the Virtual Assets Regulatory Authority, in 2017. 2022, this body supervises and regulates the use, provision and exchange of virtual assets.
Practical applications
The author of the study, Dr. Talal Sheikh, Associate Professor of Mathematics and Computer Science, Heriot-Watt University Dubai, said that the UAE government is proactive in creating an appropriate ecosystem for the development of blockchain technology and cryptocurrencies, and one of the most important initiatives in this field is the UAE Blockchain Strategy 2021 and the Dubai Blockchain Strategy, which It was launched in 2018 with the aim of enhancing government efficiency, reducing operational costs, and thus positioning the UAE as a global leader in adopting blockchain technology.
He added that the regulatory clarity provided by authorities, such as the Securities and Commodities Authority (SCA) and the Dubai Financial Services Authority (DFSA), led to instilling confidence in investors and companies looking to experiment in the field of cryptocurrencies, noting that although the UAE’s role in shaping the future of finance Through blockchain technology and cryptocurrencies, it is undeniable, but challenges remain, as security concerns, regulatory uncertainties, and the need for continuous innovation pose constant obstacles. However, these challenges also provide opportunities for the UAE to demonstrate its flexibility and adaptability in dealing with… With the evolving landscape of digital finance.
Sheikh concluded by emphasizing that the UAE’s proactive role in the blockchain and cryptocurrency sectors promises to have a significant impact on the future of global finance, as its commitment to innovation, cooperation, and responsible regulation not only positions it as a regional leader, but also as a global influencer in shaping the course of these emerging technologies.
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