UAE Phoenix Group launches 20 Megawatt digital asset mining facility in Canada

UAE Phoenix Group launches 20 Megawatt digital asset mining facility in Canada

Phoenix Group PLC (PHX), a leading multi-billion-dollar blockchain and crypto mining conglomerate listed on the Abu Dhabi Securities Exchange (ADX), has launched 20-megawatt mining facility in St Leon, Canada to grow its data center capacity and digital asset mining. The new site will add 700PH and provide the lowest electricity price (0.039 USD) in the Phoenix Group fleet with more than 97% uptime. This significant expansion plays an important role in enhancing top and bottom-line revenue within Phoenix Group’s core businesses including data center capacity and digital asset mining.

As per the press release, the site adds to the group’s overall gigawatt-scale operational and development capacity. It is part of a long-term strategy to expand the Group’s core business, with the goal of enhancing hash rate productivity while lowering costs.

Seyed Mohammad Alizadehfard (Bijan), Co-Founder and Group CEO of Phoenix Group, commented, “Expanding and strengthening our core business presence in Canada and North America, where we see a bright, growth-oriented future is a natural extension of our ambition to be at the forefront of growth and innovation in crypto mining and associated Web 3 and blockchain development. The new capacity will benefit both our top and bottom line revenue and we anticipate further investment in business expansion over the coming months.

Strategically located to utilize local energy resources effectively, the St Leon mining site optimizes operational efficiency and sustainability and maintains Phoenix Group’s position as one of the top 4 bitcoin mining operations globally. The Group’s adaptable infrastructure approach allows Phoenix to swiftly adapt to changes in the computing landscape, exploring opportunities in both blockchain and alternative high-value computing forms.

Phoenix Group boasts a 765MW mining operation, and fuel growth through strategic partnerships and innovation.

In May 2024, Phoenix Group announced financial results for the first quarter of 2024 with a Q1 net income of $66.2 million, a growth of 166% year-on-year. As per the press release, total assets surged by 237% year-over-year, soaring to $879.3 million from $261 million. ⁠The quarter-over-quarter growth in total assets stands at 5%, while revenue experienced an 18% quarter-on-quarter increase, reaching $68.9 million.

UAE Federal government exempts virtual assets and crypto from taxation

UAE Federal government exempts virtual assets and crypto from taxation

The UAE Federal Tax Authority (FTA) published on October 2nd 2024 the amended version of the Executive Regulation of Federal Decree Law No. 8 2017 on Value added tax and has exempted virtual assets and investment fund management.

The amendments which are implemented following the Cabinet Decision No. (100) of 2024 will be effective from November 15th 2024.

These amendments aim to enhance clarity, provide further details on key provisions and procedures, and align with earlier changes in the Decree-Law and other relevant tax legislation.

When it comes to financial services, the decree noted that the management of investment funds and the transfer and ownership of virtual assets, including cryptocurrencies as well as conversion of virtual assets will be exempt from value added taxation. The exceptions on conversion of virtual assets and transfer and ownership of virtual assets are treated as effective from 1 January 2018.

According to PWC, the UAE has defined virtual assets as digital representation of value that can be digitally traded or converted and can be used for investment purposes and does not include digital representations of fiat currencies or financial securities.

PWC notes, “Businesses dealing with virtual assets should analyze the impact of the exemption on their (retrospective) VAT position, especially in respect to their input tax recovery. Voluntary disclosures may be required to correct historic returns.

PWC adds, “In particular fund managers, funds and companies dealing with virtual assets should assess whether their services are within the scope of the VAT exemption and also analyse the impact of that on the input tax recovery.”

According to the recent report from Henley&Partners the UAE leads in this year’s crypto adoption Index, as it is listed among top 12 countries while leading when it comes to public adoption, and innovation and technology. The report notes that one of the top reasons for UAE’s crypto growth is its low-tax jurisdiction which offers an attractive environment for crypto businesses.

For example, when it came to public adoption of crypto, the UAE ranked second following only USA. It is the only Arab country in the top 12 for this year. As per the Index findings, the UAE stands out as a leading jurisdiction for crypto investors. Public interest is high, with a substantial portion of the population owning cryptocurrencies. This enthusiasm is matched by strong government support and a thriving start-up scene.

Bitcoin mining firm, Mining Grid opens showroom in UAE

Bitcoin mining firm, Mining Grid opens showroom in UAE

Mining Grid, a blockchain and Bitcoin mining solutions provider has announced the opening of its showroom in Al Quoz Dubai UAE, and its “Mining Race”. The Mining Race is a global program designed to empower the community to actively participate in the primary mining market, contributing to the decentralized blockchain network.

The platform not only offers access to mining opportunities but also fosters awareness and education about Bitcoin (BTC) and cryptocurrency adoption. The Mining Race awarded the highest achievers within its community, celebrating innovation, success, and teamwork.

Additionally, Mining Grid’s newly launched showroom in Dubai will serve as a hub for crypto enthusiasts to explore the latest technologies providing hands-on demonstrations of advanced mining equipment.

Solaiman Al-Rifai, Founder and Board Member, Mining Grid said, “Mining Grid’s initiatives, such as the Mining Race and the new showroom, are aligned with the growing movement toward widespread Bitcoin adoption and the blockchain’s potential to reshape industries. As more businesses and individuals embrace the power of decentralization, the future of finance is poised for a digital transformation.”

Rami Alsridi, Founder and CEO, Mining Grid said, “Bitcoin has grown from just a few cents to a market cap of $1.3 trillion, connecting communities worldwide. Through the Mining Race, we aim to unite the crypto community and build a stronger, decentralized future.”

This comes as other entities such as Phoenix Group, the Blockchain and bitcoin mining entity launched from the UAE.

VARA Dubai tightens the reigns of VASP marketing campaigns

VARA Dubai tightens the reigns of VASP marketing campaigns

The Virtual Assets Regulatory Authority (VARA) updated its marketing regulations, which it states is aimed at strengthening the regulatory framework for Virtual Asset Service Providers (VASPs) operating in Dubai but whose effects transcends to the entire UAE and GCC region. VARA has introduced a comprehensive Marketing Guidance Document to provide clear and actionable insights for VASPs engaging in marketing activities within the region. The new regulations will come into effect on October 1st 2024.

As per the press release, marketing Regulations for Virtual Assets and Related Activities 2024 are designed to enhance the integrity and transparency of marketing practices within the virtual assets sector in Dubai.

The updated regulations place a strong emphasis on the accuracy of marketing communications, the avoidance of misleading information, and the protection of consumer interests. They apply to all entities involved in marketing virtual assets or related activities, regardless of their licensing status with VARA.

VARA also issued a new Marketing Guidance Document that will serve as a vital resource for VASPs. This document provides detailed instructions and best practices on how to conduct compliant marketing activities in Dubai, ensuring that VASPs can navigate the regulatory landscape with confidence. The guidance covers a range of topics, including the appropriate use of language in marketing materials, disclosure requirements, and the ethical considerations that should underpin all marketing efforts.

“As the world’s first independent regulator for virtual assets, VARA is dedicated to creating a regulatory environment that not only protects consumers but also supports the growth and innovation of the virtual assets sector,” said Matthew White, CEO of VARA. “Our updated marketing regulations and the newly issued guidance document reflect our commitment to maintaining Dubai’s position as a global leader in digital finance. We believe that by providing clear and actionable guidance, we can help VASPs deliver their services responsibly, while fostering greater trust and transparency in the market.”

The new guideline aims to make the marketing of that VASPs undertake to be fair, clear and not misleading so that participants and investors can make informed decisions based on marketing materials. The guideline covers anything from memes, short videos to articles. As per VARA the marketing articles, videos, or memes should use plain language, clear and concise.

As per the guidelines, the “fair, clear and not misleading” requirement should be assessed in a manner which is proportionate to the means of communication, content, target audience and/or the nature of the product or service being promoted. Different audiences may require variations in the content and presentation of the Marketing materials.

As per VARA, for instance, marketing addressed to broad retail clients may need to include more information on potential risks of investments.

 In addition, the marketing materials should provide a balanced impression of the product or service being promoted, so that recipients can make informed investment decisions. For example, Marketing materials should not emphasise or exaggerate potential benefits or investment returns without indicating relevant risks and should not omit or obscure important information, statements, or warnings.

License announcements should not imply VARA endorsement

Marketing should clearly state the regulatory status of any product, service and/or platform involved, whether in Dubai or, if applicable, other jurisdictions. This includes not containing messages which may mislead the public with regards to a business’s licensing status or scope of regulated activities.

For example, a person must not present VARA’s approval of the issuance of a Virtual Asset as a regulator’s endorsement of the quality of the Virtual Asset or its issuer.

Sponsored VASP Content

Moreover, if material has been paid for either as an advertisement, advertisement feature or promoted or sponsored content in a prominent place, it needs to be identified as such.

For example, large billboard advertisements in public areas, will be viewed as being obviously identifiable as promotional in nature without the need for additional wording as it is widely understood by the public that such areas are used for advertisements.

Social media posts can include both promotional and non-promotional content and as such must be identified as Marketing.

For any sponsored content, it should be clearly stated that the content is sponsored, along with the name of the sponsor (if the sponsor is not readily identifiable from the content) (e.g. “sponsored content”, “sponsored by ABC VASP”, “paid content brought to you by ABC VASP”, “in paid partnership with ABC VASP”) in a prominent place of the content (e.g. next to the heading of the content).

VARA showcased what it qualifies as monetary and non-monetary incentives. These include offers of:

•             incentives when investing in a Virtual Asset for the first time, or signing up for an Entity’s service provided as part of any VA Activity for the first time;

•             incentives where the client refers another Entity to invest in a Virtual Asset or use an Entity’s service provided as part of any VA Activity;

•             special offers when investing a particular amount in Virtual Assets;

•             offer of gifts or other incentives once an investment in a Virtual Asset has been made or once an Entity has signed up for an Entity’s service provided as part of any VA Activity; or

•             offer of gifts or other incentives for making additional investments when already using a product and/or service.

Monetary or non-monetary incentives should be made available for an adequate period of time so that they do not create a sense of urgency for recipients of Marketing to acquire Virtual Assets and/or use services as part of any VA Activities in anticipation of future appreciation in value or profits, or create a fear of missing out on future appreciation in value or profits due to inaction, in compliance with Marketing Regulation

While disclaimers need to be legible or audible and easy to spot.

The Role of journalists and influencers

The VARA guideline defines journalists as media personnel (content creators and/or presenters) that are duly licensed by the Media Regulatory Office of the UAE; and foreign media correspondents that are duly accredited by the Media Regulatory Office of the UAE.

 “Key opinion leaders” and/or influencers are not regarded as journalists and do not qualify for consideration under the journalistic exemption.

 VARA will assess the overall purpose of content to determine whether it qualifies for the respective exemption, or whether the content is Marketing.

 In doing so, VARA will consider whether the content taken as a whole , including any promotional material contained in it – including merchandise and/or give-aways at events, charities, ceremonies etc. – is for the promotion of any Virtual Asset or service provided as part of a VA Activity or the VASP.   

Educational content generally means content which is purely educational and for informational purposes only without the intention of leading the recipients to engage in the activity of investing in a Virtual Asset or signing up for a service provided as part of a VA Activity.

Educational content which does require buying a Virtual Asset for use, or using a service provided as a VA Activity, at any stage, should limit these to where they are necessary and provide multiple options, or explain that multiple options are available, where possible.

Content which is sponsored or paid for in return for any monetary or non-monetary benefit for the author Entity will not qualify as “educational content”.

Readers are reminded that educational content must still include prominent disclaimers where they are required in the Marketing Regulations, as applicable.

Whats app groups and Telegram groups are included

VARA considers purely personal or private communications as only those that include friends, family or colleagues.

Any communications which are accessible by fifty (50) individuals or more in aggregate, whether directly or indirectly, would not be considered personal or private. Communications which are accessible by fewer than fifty (50) individuals may still be considered as Marketing, and not deemed to fall within this exemption.

Conclusion

In Conclusion VARA considers that overall campaign in UAE or those targeting GCC (Gulf Cooperating Council) whether local newspaper, mail, broadcast online or physicals will be considered by VARA.

This includes marketing campaigns that use AED as the denominator currency or one of the denominator currencies in Marketing materials; campaigns with Emirati Arabic dialect or uses local slang, ‘in words’ or phrases (either in English or Arabic); campaigns using UAE and/or Dubai imagery (including, but not limited to, the UAE flag, Dubai skyline); campaigns using UAE celebrities or famous individuals with large influence base/followings in the UAE; any Marketing in public areas in the UAE; maintaining any communication channels which target UAE residents (e.g. chatrooms or social media pages); promotional plan(s) specifically addressing/intending to target the UAE; and/or restrictions (if any) that have been put in place to prevent or restrict UAE residents from accessing Marketing materials (e.g. geoblocking of websites or advertising campaigns).

In MENA the Fastest growing crypto countries are Saudi Arabia and Qatar while biggest are Turkey and Morocco

In MENA the Fastest growing crypto countries are Saudi Arabia and Qatar while biggest are Turkey and Morocco

Chainalysis shared an excerpt from its upcoming 2024 Geography of Cryptocurrency report covering the MENA region and noting that MENA is the seventh largest crypto market globally in 2024 with the biggest two crypto countries being Turkey and Morocco.

In addition, it noted that the fastest growing crypto countries are Saudi Arabia and Qatar. Saudi Arabia remains the fastest-growing crypto economy in the MENA region, growing by 154% year-over-year, with a focus on blockchain innovation, central bank digital currencies (CBDCs), gaming, and fintech innovation more generally. Qatar follows closely as the region’s second fastest-growing market, growing by 120% year-over-year. It is noteworthy that Qatar recently officially launched its digital assets Lab, as well as digital assets and DLT framework, while Saudi Arabia has been growing and investing in Web3, gaming, AI and Blockchain.

Biggest crypto countries in MENA Turkey and Morocco

The biggest two countries in MENA were Turkey and Morocco. Turkey held 11th position while Morocco 27th where Turkey capture $137 billion and Morocco $12.7 billion.

While the UAE between July 2023 and June 2024, received over $30 billion in crypto, ranking the country among the top 40 globally in this regard and making it MENA’s third largest crypto economy.

In total the MENA region received $338.7 billion in on-chain value between July 2023 and June 2024, accounting for 7.5% of the world’s total transaction volume.

The majority of crypto activity in MENA is driven by institutional and professional-level activity, with 93% of value transferred consisting of transactions of $10,000 or above.

Stablecoins gain traction in MENA

The Chainalysis excerpt also notes that stablecoins and altcoins making gains across MENA particularly in Turkey, Saudi Arabia and the UAE. Turkey is number one in the world in stablecoin trading volume as a percentage of GDP, by a large margin. It’s important to note this measure is not saying that nearly 4% of Turkish GDP is stablecoins, but that stablecoin trading volumes on CEXs are equal to 4% of GDP in dollar equivalent terms, meaning crypto trading volumes could one day exceed a country’s measure of GDP.

Stablecoins consistently represent the majority of crypto assets purchased with the Turkish Lira, approaching nearly $6 billion in purchases in March of this year. Stablecoin purchases with the Turkish Lira are closely correlated with inflation rates.

Ethereum usage in MENA is below global average.

Unlike most countries globally, the UAE’s crypto activity is growing across all transaction size brackets, signaling a more balanced and comprehensive adoption landscape. The country also boasts a diversified crypto ecosystem, with significant activity beyond CEXs, including DeFi. The total value received by DeFi services, including DEXs, grew by 74% compared to last year, and that received by DEXs alone grew by 87%, from an estimated $6 billion to $11.3 billion.

Deepa Raja Carbon, Managing Director and Vice Chairperson of VARA, speaking to Chainalysis about the unique position VARA occupies as a regulator two years after its creation. “We’ve identified over a thousand entities conducting crypto-related activity within Dubai and we’re working through a legacy transition. Over the next year, we expect to see these entities licensed,” she explained, adding that VARA’s approach is one of collaboration rather than blind enforcement. “Both the industry and regulators come to the table with that perspective — to learn together and evolve,” she said, stressing the importance of balancing market protection with innovation.

Taurus in Qatar is offering digital asset, crypto and tokenized securities solutions

Taurus in Qatar is offering digital asset, crypto and tokenized securities solutions

Taurus announced its strategic partnership with the Qatar Financial Centre (QFC) Authority as part of the QFC Digital Assets Lab which will allow it to serve banks and financial institutions across Qatar and MENA by delivering enterprise technology from digital assets, to crypto to tokenized securities.

As per the press release, the QFC Digital Assets Lab is a key initiative within the QFC Innovation Dome, which is designed to accelerate innovation in digital assets and Distributed Ledger Technology (DLT). By fostering collaboration between businesses, start-ups, and researchers, the lab aims to position Qatar “as a leader in the digital economy, guided by the newly introduced QFC Digital Assets Regulatory Framework 2024.”

The framework sets rigorous standards for tokenization, legal recognition of digital assets, and the use of smart contracts, ensuring the highest levels of security and transparency. As a digital asset infrastructure provider, Taurus provides secure and scalable solutions for the custody, tokenization, and management of digital assets.

Through the QFC Digital Assets Lab, financial institutions in the region will now have access to Taurus’ enterprise-grade technology, which supports the full range of digital assets, from cryptocurrencies to tokenized securities.

Bashir Kazour, Managing Director at Taurus, commented, “The QFC Digital Assets Lab offers a robust regulatory environment, making Qatar a prime location for digital asset innovation. We are pleased to bring our expertise in digital asset management to this dynamic market and better serve our clients and partners across the Middle East.”

Taurus SA is a Swiss Fintech founded in April 2018, provides enterprise-grade digital asset infrastructure to issue, custody, and trade any digital assets, including cryptocurrencies, tokenized assets, NFTs, and digital currencies.

Depending on their business model, strategy, and risk tolerance, Taurus’ clients can seamlessly manage cryptocurrencies “including staking, digitize and tokenize any type of asset on any standard end-to-end, and process digital currencies of their choice.”

Taurus’ product portfolio is composed of  Taurus-PROTECT, the leading secure storage solution in Europe which is currently used by more than 30 financial institutions and corporations. Taurus-CAPITAL allows clients to issue and “manage tokenized assets on public and permissioned blockchains, as well as interact with any smart contract.

Both The Hashgraph Association as well as R3 also announced their partnerships with QFC digital assets lab and their offering.

Henri Arslanian launches children’s book Decoding crypto

Henri Arslanian launches children’s book Decoding crypto

Blockchain digital assets analyst and expert Henri Arslanian has launched Decoding Crypto with Henri & Hodler, a groundbreaking new children’s book that combines education with entertainment, guiding young readers through the fascinating world of digital assets, blockchain technology, and the future of money.

As per the press release, Decoding Crypto with Henri & Hodler is just the beginning of an ambitious project to bring digital literacy and financial education to children worldwide.

As the first book in an exciting new series, Decoding Crypto with Henri & Hodler takes readers on an adventurous learning journey alongside two charismatic crypto-enthusiasts, Henri and Hodler, who, together with a lively cast of characters—including the tech-savvy Solidity, and buddies Naka and Moto—make complex topics fun and engaging.


Through clever rhymes, vivid illustrations, and creative interactive elements, children learn about the history and evolution of money and discover new concepts about the future of money, from Bitcoin and Ethereum to the latest trends in DeFi, NFTs, Metaverses, and more.
The book introduces readers to these topics in a clear, easy to follow “A-to-Z” format, beginning with Altcoin, Bitcoin, and Cryptography … and continuing through to Yield Farming and ZK-Proof.


Developed in Collaboration With Crypto Firms Ledger and First Digital The book’s production and development spanned over three years and included interviews with dozens of educators, teachers, and parents to ensure that the subject matter is presented in a
clear, ethical, and responsible manner.


The book is powered by collaborations with leading crypto firms, with Ledger serving as the premier technology partner and First Digital serving as the premier education partner.

Decoding Crypto with Henri & Hodler is co-authored by Henri Arslanian, a globally recognized thought leader and educator in the world of crypto and digital assets. Henri is the author of several bestselling books on crypto and the future of money including “The Book of Crypto” and “The Future of Finance.”

With his experience as a university professor teaching crypto since 2015, the host of the Crypto Capsule LinkedIn educational series that is shared weekly with his over half-million LinkedIn followers, and recently the co-host of the Crypto Weekly show on CNBC Arabia, Henri brings a wealth of knowledge and a passion for educating the next generation on the future of finance.
Co-author, Michael Dotsikas, is a bestselling children’s author, creator of the award-winning “Benjamin Birdie” children’s picture book series, an experienced writer, and sought-after literary mentor with a deep commitment to making complex topics accessible and engaging for young readers, while devoted to mindful storytelling.


Together, they have crafted a book that not only demystifies the often-complex world of digital assets but does so in a way that is fun, interactive, and suitable for children of all ages. The book is illustrated by Billy Martin, who is best known as the lead guitarist for the
multi-platinum selling bank Good Charlotte.

Yat Siu, Chairman and Co-Founder of Animoca Brands, calls it “a perfect introduction to the world of blockchain and the future of money for the next generation,” while Pascal Gauthier, CEO of Ledger, highlights the book’s vital role in empowering children: “The transformative power of cryptocurrencies is something everyone needs to understand, and kids first! This book
is a must-read!”

Unlike traditional children’s books, Decoding Crypto with Henri & Hodler takes an interactive storytelling approach, blending vibrant comic book style illustrations with playful, engaging narrative to create a dynamic learning experience, capturing the imagination while inviting
reader participation.


A unique feature is the inclusion of QR codes throughout, which lead readers to additional resources, offering deeper insights into the various concepts and terms explored in the story.


Another valuable educational element is the added in-depth glossary and appendices of “fun facts” designed to equip parents and educators with additional knowledge, empowering them to better understand the subject matter.

OKX Middle East publishes new virtual asset standards for listing on its crypto exchange

OKX Middle East publishes new virtual asset standards for listing on its crypto exchange

UAE based OKX crypto exchange clarifies its new virtual asset standards prior to them being listed on its Middle East exchange as per Dubai’s Virtual Asset regulatory authority requirements.

OKX Middle East published the set of factors it will be utilizing when it evaluates virtual assets before listing them on its exchange.

According to the UAE based crypto exchange the standards have been prepared in accordance with Rule VIII.A.1 of the VARA market conduct rulebook, and are also available on OKX’s website in accordance with Rule VIII.A.3 of the VARA Market conduct rulebook.

OKX Middle East will asset the market metrics of virtual assets market capitalization, fully diluted value and liquidity and whether metrics have trended downwards over time.

It will also review the design system, such as features, use cases both intended and unintended by the issuer or relevant developers.

In terms of compliance, the crypto exchange will evaluate the virtual asset compliance features, regulations, rules or directives as well as AML/CFT sanctions, securities, and intellectual property.

It will also review how regulators are treating this virtual asset whether by VARA or other authorities outside of Dubai, including regulatory approvals

It will also review whether the virtual asset is prohibited by VARA or other regulators in or outside of the UAE.

OKX even goes as far as to asset the security and immutability of the DLT protocol on which the virtual asset is built.

Furthermore, OKX will evaluate whether the Virtual Asset may be susceptible to price manipulation for any reason and relevant mitigations that will be implemented by OKX. It will also investigate the background of issuer and whether it has been subject to any investigations or claims in relation to fraud or deceit.

OKX Middle East will finally monitor the terms and conditions of the Virtual Asset correlate with any physical market to ensure such terms and conditions conform to standards and practices in that physical market (if applicable).

OKX has been expanding its regulated operations in MENA with both a license from the Dubai UAE VARA as well as one in Turkey.

UAE Fuze and Bit2Me partner to improve digital asset connectivity

UAE Fuze and Bit2Me partner to improve digital asset connectivity

Abu Dhabi’s Hub71 startups, Fuze, MENA provider digital assets infrastructure, and Bit2Me, a Spanish digital assets company, have partnered to improve digital assets infrastructure connectivity between Latin America, Europe, and the Middle East.

As per the press release, this agreement unites two of the world’s leading digital assets platforms to maximize the prospect of platform trading using the United Arab Emirates Dirham (AED). Fuze and Bit2Me’s collaboration will enable companies to collaborate on digital assets, products, and services. This includes enabling liquidity provision, collaborating on cross-border trading between Latin America, Europe, and the Middle East, and facilitating connections, trades, and transactions in target market currencies. Both organizations will benefit from enhanced stability, decreased operational costs, and increased market efficiency.

Mohammed Ali Yusuf, Co-Founder and CEO of Fuze, said, “Bit2Me has a strong focus on regulation, security, and compliance across digital assets, marking them as an ideal partner for our strategic expansion. Together, we will be able to innovate and tap into the wealth of possibilities for regulated digital assets globally. We are proud to sign this agreement in Abu Dhabi, where we started our journey, a place that will be pivotal in developing cryptocurrency and the future of finance.”

Koh Martinez, Co-CEO of Bit2Me added, “There is a significant demand for digital assets services across the Middle East. We are delighted to enhance our global offering in tandem with Fuze.  Our teams will be able to share unique experiences and case studies across three continents to provide solutions for the ever-evolving cryptocurrency market.”

Peter Abou Hachem, Head of Growth and Strategy at Hub71 commented, “Within just one year of accepting our first cohort in Hub71+ Digital Assets, we have seen international startups like Bit2Me and Fuze join our vibrant community and collaborate to accelerate development in the digital assets space. This partnership is a testament to our community-focused programs and the supportive regulatory environment of Abu Dhabi Global Market (ADGM). By connecting and nurturing startups within our ecosystem, we are meeting our objective of driving innovation and creating valuable partnerships from our ecosystem to advance Abu Dhabi’s position as a leader in technology globally.”

In August of this year, Klumi Ventures a blockchain-native Venture Capital Firm and Fund Manager based in Abu Dhabi, partnered with Fuze, to harness Klumi Ventures’ investment acumen and Web3 expertise alongside Fuze’s robust digital assets infrastructure to accelerate the adoption of Web3 technologies throughout the region. 

Even Tether, the global stablecoin and Fuze, signed a Memorandum of Understanding (MoU) to establish the terms of a collaboration on educational initiatives within the digital asset realm, with a particular focus on Turkey and the Middle East.

Central Bank of Qatar token regulations excludes crypto and stablecoins

Central Bank of Qatar token regulations excludes crypto and stablecoins

Qatar just announced its digital assets or token regulations. The Central Bank of Qatar, Qatar Financial Authority, as well as the QFC regulatory authority released the regulations that would allow for tokenization of real world assets not including cryptocurrencies or stablecoins. This comes after Qatar had announced its DLT regulations, as well as launched its Digital Assets Lab. Throughout this time Qatar had always made it clear especially through QFC that this pertained to tokenization of real world assets for financial and investment purposes.

On Sunday October 29th, Qatar announced one of the biggest digital assets initiatives in the country and the GCC region, the Qatar Innovation Dome for digital assets. The digital asset lab was aimed to develop tokenization platforms and ecosystems for everything that has value whether tangible assets or intangible assets including real estate assets, securities, Sukuk, bonds and others in the future utilizing DLT ( distributed ledger technologies), blockchain, and smart contracts.

Today the digital asset token regulations has provided the framework to implement this.

The regulations cover all activities related to permitted tokens

As per the framework the regulations apply to tokens meeting the criteria specified which are under permitted tokens. It also covers transactions involving permitted tokens, and the provisioning of these token services. It also covers token custodians, and token exchanges, token transfer providers, token validators as well as token issuers which they call token generators.

Token custody services means the service of holding or controlling tokens on behalf of clients; or holding or controlling the means by which clients’ tokens may be recorded and transacted on token infrastructure. A company that holds or safeguards the private keys for its clients’ tokens is providing custody services in relation to those tokens. An entity licensed to provide token custody services may be referred to as a token custodian.
Qatar regulations also discussed Operating a token exchange which means operating a system which brings together multiple third party buying and selling interests in tokens, in accordance with the system’s non-discretionary rules, in a way that results in a contract in respect of the tokens. As per the regulation a token exchange which operates a facility which is merely an order routing system where buying and selling interests in, or orders for, tokens are merely transmitted but do not interact is not operating a token exchange.

Token is defined as digital representation of real property or rights

As per the regulation a token means a unique electronic data unit that is cryptographically secured. It is a digital representation of real or personal property rights including contractual rights and is capable of being issued, transferred or stored using DLT ( Distributed Ledger technology) or other similar technology.

DLT or blockchain technology will be used to transfer and store the permitted token.

Crypto and stablecoins not included in Digital asset regulation

The new digital asset regulations however are very clear on what they considered as not permitted tokens. In short, non permitted tokens are tokens that do not represent a right in a property. As such cryptocurrencies, and stablecoins are considered not permitted or excluded tokens from this regulation.

As noted in the regulation “ Excluded tokens include a currency that can otherwise be used as a means of payment. Examples: A cryptocurrency token that is used as an alternative to fiat currencies but is not issued or backed by any governmental authority and does not represent any ‘off-chain’ property, is an example of an excluded token.”

It goes on to add, “ A token commonly referred to as a stablecoin, is an example of an excluded token. This is because a stablecoin is regarded as a substitute for currency that can be used as a means of payment.”

Accepted tokens include for example a token representing a right to a commodity, such as a precious metal.

Investment tokens included in regulation

The regulation also allows investment tokens under what it calls tokenized schemes or token investing schemes or tokenized funds.
As per the regulations, “ A QFC scheme, or a sub scheme of a QFC umbrella scheme, is a tokenized scheme if any of the units in the scheme or sub scheme are investment tokens. A QFC scheme, or a sub scheme of a QFC umbrella scheme, is a token investing scheme if the scheme’s, or sub scheme’s, constitutional document states that it is an object of the scheme to invest in tokens.”
The regulation notes that tokenized investment schemes could cover Islamic funds, money market funds, feeder funds or property fund schemes.
In addition the regulation discusses tokenized investment funds and notes that, “ a professional investor fund is a tokenized fund if any of the units in the fund are investment tokens; a token investing fund if the fund’s constitutional document states that it is an object of the fund to invest in tokens.

 H.E. Sheikh Bandar bin Mohammed bin Saoud Al Thani, Qatar Central Bank Governor, stated, “Launching the 2024 Digital Assets Regulations marks a significant milestone in our journey towards realizing the Third Financial Sector Strategy.” He noted that this framework will create significant opportunities and support establishing a robust regulatory environment within the financial sector. This will support Qatar’s digital transformation goals, in line with the Third National Development Strategy, the final phase of the Qatar National Vision 2030.

Yousuf Mohamed Al-Jaida, Chief Executive Officer, QFC, added “The introduction of the Digital Assets Framework 2024 underscores our commitment to creating a robust regulatory regime aligned with international best practices. We are proud to set a blueprint for developing, applying, and operating digital assets, that promotes market trust and confidence. We anticipate that this regulatory clarity will attract both domestic and international players, boosting Qatar’s financial services sector competitiveness.”