As regulation hots up in the US following the Executive Order, and with the prospect of new UK government plans to regulate the cryptocurrency market in the coming weeks, it’s clear that countries can no longer sit on the sidelines of the crypto industry. The potential shift in power spurred on by innovation in blockchain and related technologies means playing safe for jurisdictions is no longer an option. The UAE is well positioned to be a regional hub for the crypto industry, with a regulatory structure in place and with more than 350 blockchain companies operating there. UAE also took advantage of the pandemic to attract business with aggressive vaccination while largely keeping its borders open, while retaining business through low taxes and a light touch regulatory mindset – a perfect environment for attracting crypto entrepreneurs in the last two years.

Indeed, some call Dubai the fastest growing hub in the world right now for crypto technology, reflected in the fact that Binance has now set up offices in Dubai. It’s also benefiting from business relationships with the booming Israeli crypto sector based in Tel Aviv, according to a report in the Wall Street Journal following recent peace accords. In addition, it’s reported that the Abu Dhabi-headquartered fund Mubadala, one of the largest sovereign wealth funds with over $243bn AUM, is investing in the blockchain sector. Mubadala’s CEO Khaldoon Al Mubarak told CNBC in December that he was not a skeptic but saw it as real. But he did admit the regulatory format was not there totally, but it needed to be in place in order for the asset class to transition into something new. “We are looking at the ecosystem around crypto and we are investing in that system.”

This global momentum to embrace crypto and blockchain was addressed by the Chairman of BigONE Anndy Lian recently, in a speech to His Highness Awadh Mohamed Al Sh Mogrin Sultan, a top-ranking diplomat, and Honourable Chairman of the Alawad Fund. Lian said he saw similarities with the innovative and supportive crypto environment in Singapore: “I’ve actually seen the same trend in Dubai, I’ve met some good projects that are very serious about what they do, whether it’s looking at web3 or decentralized storage, or DeFi.”

Elaborating on two key trends starting with DeFi Lian said the integration of traditional finance products into DeFi such as bonds meant this was a sustainable sector for a country such as Dubai. He said the second significant trend was the crypto mining business with a very good uptake of new miners. “There are many new investors going into crypto mining, and when I say big investors, we’re talking about at the very least tens of billions of dollars going into the mining space. If you look at the longer term, it is a very lucrative investment.”

Lian remarked that as a partner & LP to several funds, with an AUM (assets under management) of around $500 million and having invested in crypto startups since 2018, he was looking forward to talking to people and brands about working together on the investment front in Dubai. “I want everybody to work together. You know, we should work together, be open, and welcome, good partners; this is the same philosophy that you do as well; this is the place where we will start to build a new story,” added Lian.

Earlier in March His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, approved the first ever law on regulating virtual assets. “Today we are participating in designing the future of virtual assets globally.” Sheikh Mohammed stressed that Dubai possesses all the capabilities to be a key global center in the field of virtual assets, supported with the new legislative environment. “Dubai will provide the most advanced virtual asset ecosystem in terms of organization, governance and security. Approving the virtual asset law and establishing the Dubai Virtual Asset Regulatory Authority is a vital step that establishes the UAE’s position in this sector… a step that aims to help the sector to grow and protect investors,” he confirmed.

The Chainalysis ‘2021 Geography of Cryptocurrency Report’ published in October 2021, found plenty of potential for growth in the Middle East in general and specifically the UAE. The Middle East as a whole is the second-smallest cryptocurrency economy studied by Chainalysis, having received $271.7 billion worth of cryptocurrency between July 2020 and June 2021 (6.6% of global activity). “While that total is low compared to other regions, it represents nearly a 1500% increase over the Middle East’s total activity the previous year, making it one of the fastest-growing markets in the world,” the report’s authors said.

Reflecting the success in promoting crypto businesses in Dubai, it was reported on March 28 that cryptocurrency exchange business Bybit has received in-principle approval to conduct a full spectrum of virtual assets business in Dubai, the firm announced with the UAE Ministry of Economy at the World Government Summit 2022. Bybit also confirmed that it plans to set up its global HQ in Dubai, under the Emirate’s “test-adapt-scale” virtual assets market model.