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Friday, September 22, 2023

Wealthy Middle Eastern capital builds bridge from TradFi to crypto


The Abu Dhabi and Dubai hubs in the United Arab Emirates scored equally on cryptocurrency regulatory structure and cryptocurrency adoption, the two most heavily weighted criteria in the overall ranking. However, while the UAE’s regulatory structure is in the top tier (35% of its overall score), its cryptocurrency adoption score (10%) is in the bottom quintile. Arguably, the low score reflects the larger UAE population rather than the behavior of Abu Dhabi and Dubai residents themselves. The UAE capital trails Dubai in almost every other measure we measure, including quality of life, ease of doing business and digital infrastructure (criteria across all enabler categories) and cryptocurrency jobs, companies and activities per capita (which includes opportunity category).

Abu Dhabi, the capital of the United Arab Emirates (UAE), is quieter than the hustle and bustle of Dubai. While Dubai is widely considered a cryptocurrency hub, Abu Dhabi is still in the spotlight.

Basil Al Askari, co-founder and CEO of MidChains, an Abu Dhabi-based digital asset exchange, said: “Abu Dhabi has always been an institutional-focused market, while Dubai has been more of a consumer-focused market. Exchange and Custodian for Global Institutions. So if you’re looking for a cryptocurrency hub where blue-chip bank executives shake hands with players in the digital asset space, look no further than Abu Dhabi.

The capital’s financial services industry is centered around the Abu Dhabi Global Market (ADGM), an offshore economic free zone whose agenda and regulatory framework is of great value to those looking to bridge the gap between institutions and cryptocurrencies.

Pascal St-Jean, president of Canadian digital asset management firm 3iQ, told CoinDesk, “Abu Dhabi is good at creating transparency in digital assets for more institutional types of financial systems (such as prime brokerage, lending, asset management, etc.).” Get permission.

Additionally, the economic sandbox facilitates an open dialogue between the fintech/crypto industry and the free zone authorities. Al Askari recounted his experience of approaching ADGM on behalf of MidChains in 2018, before the regulatory framework for cryptocurrencies was established: “We pitched our idea and said, well, can you regulate us? Initially thought within 10 minutes of the meeting they would kick us out […] But to our surprise, it was a very productive meeting, and they invited us to comment on the draft guidance, which was eventually released later that year. “

In addition to licenses and clear regulation, ADGM’s growth ambitions to incorporate digital assets have also brought in significant investment, making it a hotspot for entrepreneurs looking to raise capital in the region.Abu Dhabi Global Market (ADGM) is hub 71is a physical hub on Al Maryah Island in Abu Dhabi that houses tech start-ups, investors and an incentive program to foster innovation. Earlier this year, Hub 71+ digital assets Announced an initiative where $2 billion in funding will be earmarked to support Web3 projects.Abu Dhabi too mubadala investment co.the country’s sovereign wealth fund.

The Venom Blockchain Foundation, a layer 0 blockchain project dedicated to supporting Web 3 developers in the MENA region, has become the first Fully licensed by Abu Dhabi Global Market (ADGM) July 2022, highlighting the Free Zone’s commitment to fostering innovation in the digital economy.

However, Abu Dhabi has not been immune to the effects of the crypto winter. In February, cryptocurrency exchange Kraken announced that it would withdraw its stake less than a year after receiving a license to open in Abu Dhabi. But new Abu Dhabi entrants like 3iQ are finding community alongside familiar brands, as some of the industry’s biggest players, St-Jean told CoinDesk, like Coinbase Abu Dhabi Global Market is reportedly being approached to establish a regional base in the capital.

Cryptocurrencies in Abu Dhabi will “explode in the next five years,” St-Jean declared.


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