The United Arab Emirates is set to give the green light to ICOs for corporate financing and could have provisional regulations in place early next year. Perhaps more significantly, the country’s Securities Watchdog has revealed a co-operation with local authorities in Dubai and Abu Dhabi to create unified rules for cryptocurrency exchanges.
The Persian Gulf area of the Middle East is home to some of the biggest High Net Worth Individuals in the world, so this is a significant step. The UAE, including Dubai, have shown themselves willing to adapt to cryptocurrencies and blockchain technology. Dubai leads the race and has implemented blockchain tech into its court systems and land registries, with much more to come, but the other emirates are following in its footsteps.
“The board of the Emirates Securities & Commodities Authority has approved considering ICOs as securities. As per our plan, we should have regulations on the ground in the first half of 2019,”
– Obaid Saif al-Zaabi, UAE Securities Watchdog.
Business Friendly Regs on the Way
ICOs are just one part of a new plan to forge more business-friendly regulations and the UAE also wants to boost IPOs with new rules that mean family owners can sell a portion or all of their companies. The Prime Minister’s office has yet to rubber stamp the plan, but that’s a formality.
The UAE has some catching up to do if it wants to emulate Dubai’s success with blockchain technology, but that’s not necessarily the intention. Of late, several countries are attempting to keep blockchain development and treat cryptocurrency as an entirely different issue. China is the clearest cut example to date, as the country has banned all cryptocurrency trading while investing heavily in the blockchain.
Does the Blockchain Need Digital Currency?
There are serious doubts as to whether than can work as a long-term strategy, though. The general consensus is that for the blockchain to take hold, a healthy cryptocurrency trading environment is an essential ingredient.
If the Emirates can encourage the cryptocurrency industry and create an ecosystem, rather than simply focusing on the technology, then there’s no reason why the Gulf cannot become an integral part of the cryptocurrency scene.
The UAE has consciously moved away from oil reliance in recent decades and embraced tourism and technology, but it remains to be seen how the Gulf state deals with ICOs and the future of digital currency.
There is a lot of untapped potential in the Middle East and several nations working together to create unified regulations could mount serious opposition to the established order of cryptocurrency exchanges, as some of the richest families in the world look to grab a slice of the lucrative digital currency market.
The author is not invested in any digital currency.