Tag Archives: dubai

How the Gulf conflict recast risks for Asian investors in Dubai

How the Gulf conflict recast risks for Asian investors in Dubai
Asian digital entrepreneurs that once saw Dubai as a safe, well-connected base for global expansion are now reassessing that view after the US-Israel war on Iran exposed vulnerabilities in the city’s appeal as a financial and technology hub.
For many investors and founders from India, China and Southeast Asia, the strain is not just about physical security but also about what disruption around the Strait of Hormuz has revealed about liquidity, credit and market confidence.

Dubai has in recent years positioned itself as a premier global hub for digital businesses focused on technologies such as artificial intelligence, fintech and blockchain, helped by policies including 100 per cent foreign ownership and tax incentives.

But the Iran conflict – during which Tehran has targeted cities such as Dubai and Abu Dhabi with drone and missile attacks – has left many businesses facing not only a security threat, but also higher borrowing costs and greater uncertainty over capital flows, according to analysts.

Last month, the central bank of the United Arab Emirates announced a “resilience package” to provide liquidity support and bolster the banking sector, but analysts said the broader ecosystem still faced challenges in maintaining liquidity and building resilient supply chains.

“For technology companies, the risks are less about physical infrastructure and more about financial infrastructure, especially as broader tensions affect market confidence or key routes like the Strait of Hormuz,” said Rafiza Ghazali, managing director for consumer banking at Fasset, a banking and investment platform focused on emerging markets.

The disruption of shipping through the Strait of Hormuz amid the Iran war sent oil prices soaring by 60 per cent to around US$100 per barrel within a month and spurred severe liquidity crunches in the freight market. It also increased operational risks and regulatory compliance challenges.

While a shaky US-Iran ceasefire has allayed some investor concerns, uncertainty remains about whether this pact will hold and lead to a complete reopening of the Strait of Hormuz.

“While it is difficult to precisely predict outcomes at this stage, any constraints are likely to be episodic and sentiment-driven rather than sustained,” Ghazali said. “I would view this more as a stress test rather than a structural shift.”

The demand for cross-border financial services would remain over the longer term, he said, adding that companies that had built strong fundamentals would remain resilient.

Dubai has attracted substantial amounts of Asian capital in recent years, with India the biggest single source of foreign direct investment into the emirate in 2024, accounting for 21.5 per cent of total inflows, according to official data. Dubai said total FDI reached 52.3 billion dirhams (US$14 billion) last year.

Many Asian financial and digital firms now use Dubai as a base for expansion across the Middle East, Africa and South Asia, often setting up in the Dubai International Financial Centre (DIFC), the city’s main financial hub. DIFC says it serves a 77-country region and hosts more than 1,670 innovation and tech firms.

Some have expanded their presence there in recent months, including India’s Juspay, which opened its regional headquarters in DIFC in February, and Singapore-based Dymon Asia Capital, which opened its first Middle East office in Dubai in late 2024.

The war with Iran has also disrupted critical transport infrastructure, with Dubai International Airport temporarily suspending some operations after drone incidents and Jebel Ali Port, one of the world’s busiest, facing stoppages after attack-related damage and debris.

“Most critically, digital infrastructure such as data centres and cloud services has been directly targeted, threatening service continuity,” said Anndy Lian, a Singapore-based adviser to governments on blockchain and IT.

The six-week conflict was already beginning to shift sentiment among a section of Asian investors, though most saw the situation as a temporary setback rather than a permanent strategic shift, he added.

“Investor sentiment has shifted towards capital flight, with some wealthy Asians relocating liquid assets to Singapore or Hong Kong,” he said, adding that other locations such as India and select European gateways had also gained attention.

Business resilience

Lian said the overall resilience of the business ecosystem for investors in the UAE remained strong, although a prolonged conflict could amplify risks for Asian investment portfolios in the region.

“At this stage, you’re realistically looking at 20 to 40 per cent of previously accessible capital becoming difficult to access,” said Raj Kapoor, president of the India Blockchain Alliance, adding that this would affect start-ups at a growth stage, real estate players and venture capital firms in particular.

“If the conflict is short-lived, markets would normalise quickly and most of this capital ‘comes back,’ he said.

The key issue was not any single threat, but how multiple risks occurring simultaneously due to geopolitics and security exposure were amplifying impact and uncertainty, Kapoor said.

“Dubai has long been viewed as insulated from regional conflict, but recent Iranian threats and strikes targeting Gulf infrastructure, including energy assets and data centres, have tested that assumption,” he added.

Investors remain hopeful that the situation will eventually stabilise.

Sunyong Hwang, CEO of Abu Dhabi-based blockchain company NEXPACE, said the Gulf region had built itself into a meaningful destination for Asian digital entrepreneurs and investors because of regulatory clarity and government-led digital investment with a long-term vision.

“Geopolitical uncertainty tests those foundations, and we continue to monitor developments closely,” he said.

“From our perspective, however, our global headquarter presence in Abu Dhabi has always been rooted in long-term strategic orientation. That calculus does not change in the face of short-term disruption.”

 

Source: https://www.scmp.com/week-asia/economics/article/3349694/how-gulf-conflict-recast-risks-asian-investors-dubai?module=perpetual_scroll_0&pgtype=article

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Why Dubai’s Regulatory Hack Could Rewrite Crypto’s Rulebook

Why Dubai’s Regulatory Hack Could Rewrite Crypto’s Rulebook

The recent announcement by Dubai’s Virtual Assets Regulatory Authority (VARA), allowing licensed crypto companies to host other firms under their umbrella through “Sponsored Access,” represents a seismic shift in regulatory strategy. This policy, operationalized in 2024, dismantles traditional barriers to entry in the cryptocurrency sector while maintaining institutional-grade oversight. I argue that this model exemplifies “smart regulation”—a framework that balances innovation with accountability, scalability with safety, and local sovereignty with global ambition.

By analyzing its mechanics, implications for startups and institutional players, and alignment with broader trends in regulatory design, it becomes evident that Dubai has redefined what it means to lead in the digital economy.

Barriers, Not Gateways

Prior to this policy shift, launching a regulated cryptocurrency product in Dubai was a complicated process. Prospective virtual asset service providers (VASPs) faced a gauntlet of requirements: months-long licensing procedures, substantial capital investments in infrastructure, and exorbitant legal fees to navigate VARA’s stringent compliance standards. As of early 2024, the average time to secure a full license exceeded six months, with costs often surpassing $500,000—a prohibitive barrier for startups lacking institutional backing. While these measures aimed to safeguard financial integrity, they inadvertently stifled competition, centralized power among well-capitalized incumbents, and delayed the deployment of innovative products to market.

This approach mirrored global trends, where regulators—grappling with the volatility and novelty of crypto—defaulted to heavy-handed frameworks. For instance, the European Union’s Markets in Crypto-Assets (MiCA) regulation, finalized in 2023, imposed rigorous disclosure and transparency mandates, creating compliance burdens that smaller firms struggled to meet. Similarly, the U.S. Securities and Exchange Commission’s (SEC) enforcement-heavy stance against exchanges like Binance and Coinbase has fostered a climate of uncertainty, driving innovators to jurisdictions with clearer rule sets. Dubai, despite its reputation as a tech-forward hub, risked falling into the same trap—until now.

Compliance, Shared

VARA’s Sponsored Access model inverts this paradigm by leveraging existing license holders as “Regulatory Hosts.” Under this system, licensed VASPs—subject to VARA’s approval—can onboard unlicensed entities as “appointed representatives,” effectively extending their compliance infrastructure to these newcomers. The hosts assume full legal responsibility for their sponsored firms, including audits, reporting obligations, and capital adequacy requirements. Crucially, VARA retains overarching oversight, ensuring that decentralization of accountability does not equate to dilution of standards.

This layered approach draws parallels to the UK’s Financial Conduct Authority (FCA) “parent-subsidiary” licensing model, which allows established firms to vouch for affiliates. Dubai’s iteration is distinct in its operational scalability. By mandating that Sponsored VASPs be locally incorporated, VARA anchors accountability within its jurisdiction while enabling rapid onboarding. Early data reveals that over 40 startups have leveraged this to launch products within 30 days of application—a 90% reduction in time-to-market compared to traditional licensing. Costs, too, have plummeted, with sponsored firms reporting compliance expenses under $50,000—a threshold accessible to early-stage ventures.

Speed. Cost. Credibility.

The implications of this shift are profound. First, Sponsored Access democratizes entry into the UAE’s crypto ecosystem, enabling nimble startups to pilot products without diverting resources to redundant compliance structures. For instance, a decentralized finance (DeFi) protocol focused on cross-border remittances can now concentrate on algorithmic risk modeling rather than rebuilding know-your-customer (KYC) systems from scratch. Second, the policy aligns with investor appetites for regulated vehicles: institutional allocations to UAE-based crypto funds have surged, as it reduces counterparty risks.

Notably, this model circumvents the pitfalls of regulatory sandboxes—a tool widely criticized for creating artificial environments that are disconnected from real-world constraints. Sandboxes, such as Singapore’s MAS initiative, often impose arbitrary transaction limits and short-term licenses, forcing firms to reengineer operations post-graduation. Sponsored Access, by contrast, immerses startups in full regulatory compliance from day one, fostering muscle memory around anti-money laundering (AML) protocols and consumer protection. This distinction is vital: while sandboxes simulate safety, VARA’s framework embeds it.

Compliance That Scales

At its core, Sponsored Access embodies the philosophy of “smart regulation”—the idea that regulatory systems must evolve beyond one-size-fits-all mandates. By distributing accountability across hosts and sponsored entities, VARA mitigates its own bureaucratic load while preserving systemic resilience. Consider the analogy of cloud computing: just as AWS provides scalable infrastructure for startups to deploy applications without owning servers, Sponsored VASPs offer a compliance “cloud” where smaller players rent access to regulatory frameworks.

This model also addresses a persistent tension in crypto governance: balancing innovation with investor protection. Critics of decentralized finance (DeFi) often cite its “Wild West” reputation—characterized by rug pulls, exit scams, and opaque tokenomics that erode retail trust. Sponsored Access inoculates against such risks by tethering every participant to a vetted host, creating a chain of liability that deters malfeasance. For example, if a sponsored exchange facilitates illicit transactions, VARA can penalize both the exchange and its host, ensuring that accountability cascades upward.

No Free Passes in Compliance

Skeptics may question whether delegated oversight compromises rigor. But VARA’s design anticipates this concern. Sponsored VASPs must undergo annual third-party audits, publish transparency reports, and maintain minimum capital reserves tied to their risk profiles—a structure reminiscent of Basel III’s tiered capital requirements for banks.

Moreover, the policy incentivizes hosts to act as gatekeepers. Since their reputational and financial stakes are high, Sponsored VASPs conduct due diligence exceeding VARA’s baseline standards. I spoke with two licensed hosts who revealed that all required sponsored firms to implement real-time blockchain analytics tools—a measure beyond current regulatory mandates. This “compliance arms race” elevates industry standards organically.

Regulation That Attracts

The UAE’s strategic bet on Sponsored Access is already paying dividends. Dubai attracted 60% of the Middle East’s crypto venture capital, with firms like Amber Group and Bybit establishing regional headquarters. More critically, the policy has catalyzed niche innovation: startups specializing in sharia-compliant tokenization and halal blockchain gaming—sectors often overlooked in Western markets—are flourishing under this model.

This growth is not merely quantitative. Dubai’s model challenges the dominance of offshore crypto hubs like Seychelles and the British Virgin Islands, which thrived on lax oversight but now face increasing scrutiny from G20 regulators. By offering a middle path—neither a sandbox nor a free-for-all—the UAE positions itself as a Goldilocks jurisdiction: strict enough to earn G20 approval, flexible enough to outpace peers.

Risks, Replication, and What Comes Next

Despite its merits, Sponsored Access is not without risks. Over-reliance on a handful of hosts could create systemic vulnerabilities: if a major VASP collapses, its sponsored entities might face cascading suspensions. VARA must also guard against regulatory arbitrage, where firms exploit ambiguities in cross-border enforcement. To address this, the authority has initiated bilateral agreements with counterpart agencies in other countries, harmonizing audit standards and information-sharing protocols.

Globally, Dubai’s experiment could inspire copycats. The U.S. Commodity Futures Trading Commission (CFTC) has floated similar ideas for derivatives trading, while Brazil’s Securities and Exchange Commission (CVM) is exploring sponsored models for security tokens. If these jurisdictions adopt VARA’s principles, we may witness the emergence of a modular regulatory architecture—a “Lego-block” system where compliance frameworks interlock across borders.

Blueprint for the Digital Age

VARA’s Sponsored Access policy is more than a local reform—it is a blueprint for governing frontier technologies without sacrificing dynamism. By reimagining regulation as shared infrastructure rather than a bottleneck, Dubai has shown that innovation and oversight can coexist without being adversaries. Startups gain agility, hosts earn revenue from compliance-as-a-service, and regulators preserve systemic stability—all while cementing the UAE’s status as a vanguard of the digital age.

As the crypto industry matures, the lessons from Dubai will resonate far beyond the Persian Gulf. In an era where AI, quantum computing, and biohacking challenge existing governance models, the UAE’s gamble offers a template: distribute accountability, empower intermediaries, and build frameworks that scale with technology—not against it. The future belongs to regulators bold enough to take the lead.

 

Source: https://intpolicydigest.org/why-duba-s-regulatory-hack-could-rewrite-crypto-s-rulebook/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Fireside chat with Anndy Lian at World Tokenization Summit, Dubai

Fireside chat with Anndy Lian at World Tokenization Summit, Dubai

Insights

[sc_fs_multi_faq headline-0=”h2″ question-0=”What is the background of Anndy Lian, the guest speaker in the fireside chat on real-world tokenization?” answer-0=”Anndy Lian, based in Singapore, entered the crypto world in 2013 and became fully immersed in blockchain by 2017. He serves as an intergovernmental blockchain expert, book author, and has advised various governments.” image-0=”” headline-1=”h2″ question-1=”How does Anndy Lian view the state of real-world tokenization, and what changes has he observed since discussing the concept in 2017-2018?” answer-1=”Anndy Lian acknowledges the significant traction real-world tokenization has gained. Initially met with skepticism, governments and companies now embrace the idea, recognizing its straightforwardness. The technology for asset tokenization is deemed ready, with big banks and governments leading the wave.” image-1=”” headline-2=”h2″ question-2=”What are the key challenges highlighted by Anndy Lian regarding the revenue model behind some real-world asset (RWA) projects?” answer-2=”Anndy Lian questions the sustainability and revenue generation of RWA projects, especially those tokenizing assets like mid-level properties. He emphasizes the liquidity problem associated with certain asset tokenization.” image-2=”” headline-3=”h2″ question-3=”According to Anndy Lian, what is the future outlook for stablecoins and carbon credit tokenization, and how do governments perceive stablecoins?” answer-3=”Lian sees stablecoins as here to stay, with more governments likely to embrace them within a certain framework. He views carbon credit tokenization as a valid use case, citing the intriguing traceability of the credit itself.” image-3=”” headline-4=”h2″ question-4=” In Anndy Lian’s perspective, what impact could tokenization have on the financial industry if adopted on a large scale, and what does he envision for the future of transactions?” answer-4=”Lian believes tokenization, if widely adopted, could revolutionize the financial industry, making transactions more efficient, faster, and cheaper. He envisions the potential for 24/7 clearance and money transfers, leading to a more effective financial system.” image-4=”” count=”5″ html=”true” css_class=””]

 

In the ever-evolving world of blockchain and cryptocurrencies, the concept of real-world tokenization has been gaining significant traction. To delve deeper into this topic, we recently had the pleasure of hosting a fireside chat with Anndy Lian, an intergovernmental blockchain expert and book author.

The discussion was led by Faraj, the Chief Commercial Officer of Venom Foundation, a layer one chain out of Abu Dhabi focusing on stable coins and real-world asset organization globally. Faraj is also the founder of a large community of crypto executives, boasting around 2,000 members.

The guest speaker, Anndy Lian, is based in Singapore but often travels around the globe. He embarked on his journey in the crypto world in 2013 when he bought his first Bitcoin. By 2017, he had fully immersed himself in the blockchain space and has never left since. Lian advises different governments. At one point, he served as a blockchain advisor to an intergovernmental group.

The State of Real-World Tokenization
When asked about his views on real-world tokenization, Lian acknowledged the obvious traction the concept has gained over the years. He recalled how governments were skeptical when he first started discussing the idea around 2017-2018. However, the narrative has since changed. Today, governments and companies are more open to the idea, recognizing the straightforwardness of real-world asset (RWA) tokenization.

Lian believes that the technology for tokenizing assets is 100% ready. He sees big banks and governments pushing the RWA wave, indicating a promising future for the concept. However, he also highlighted a key issue: the revenue model behind some of these RWA projects. He questioned how these companies would sustain themselves and make money, especially given the liquidity problem associated with tokenizing certain assets like mid-level properties.

The Future of Stable Coins and Carbon Credit Tokenization
Discussing the future of stablecoins and carbon credit tokenization, Lian expressed that most government bodies he interacts with recognize that stablecoins are here to stay. He sees a future where more governments will embrace stable coins within a certain framework, which could lead to the acceleration of Central Bank Digital Currencies (CBDCs).

As for carbon credit tokenization, Lian sees it as a valid use case. He has interacted with several carbon credit exchanges and believes that the traceability of the credit itself would be very interesting.

The Impact of Tokenization on the Financial Industry
If tokenization is taken seriously and adopted on a large scale, Lian believes it could have a long-lasting impact on the financial industry. He envisions a future where transactions become more effective, with money moving from point A to B in a much faster and cheaper manner. He also sees the potential for 24/7 clearance and money transfers, leading to a more effective financial system.

The Next Driver of Mass Adoption
When asked about the next driver of mass adoption, Lian expressed his hope for more people to start talking about how they can spend their crypto. He believes that the next “wow” moment would be seeing more adoption, leading to a larger community and driving crypto to the next level.

Conclusion
The fireside chat with Anndy Lian provided valuable insights into the world of real-world tokenization, stablecoins, and carbon credit tokenization. As the blockchain and crypto space continues to evolve, these discussions play a crucial role in shaping the future of the industry. As Lian aptly put it, the key is to read, learn, and explore for oneself, rather than relying solely on influencers or hype.

World Tokenization Summit was held on 21st of November 2023 at Melia Desert Palm, Al Awir Road, Warsan 2, Dubai, United Arab Emirates.

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j