In a recent article on Pinsentmasons legal firm website, the article discusses Dubai VARA’s Full market product regulatory regime for virtual assets and its upcoming rollout.

The legal expert Tom Bicknell states, that after VARA’s roll out of its minimum viable product license regime which allowed participants to undertake their activities within an agreed limited scope and specifically to their authorized market segment, VARA will soon be launching its FMP framework which will seek to monitor global trends of the virtual industry and where appropriate issue further rules and guidance

Tom Bicknell of Pinsent Masons states, “Encompassing the learning’s from its MVP licensing stage and widespread industry engagement, VARA’s introduction of the FMP ( Full Market Product) license will serve as a firm footing for the next stage of growth for the UAE’s leading virtual asset industry.”

Once the rollout begins, MVP license holders and other VASPs will have to apply for an FMP license to undertake their activities in the market. The FMP regime is structured around ensuring that anti-money laundering and combating the financing of terrorism (AML/CFT) compliance standards are met in accordance with the Financial Action Taskforce’s recommendations for VASPs. VARA said the FMP regime will also apply ongoing internal controls, corporate governance and conduct of business rules appropriate to the risk profile of the applicant.

Bicknell adds, “VARA is undertaking engagement and consultation with market participants as part of its development of the FMP framework with a version of the framework expected to be released shortly. It is worth noting that VARA has made clear that, notwithstanding the release of the FMP framework, the regulator will seek to monitor global trends of the virtual industry and where appropriate issue further rules and guidance.”

There are 112 countries that are — in one way or another — exploring central bank digital currency (CBDC). Of this number, 11 countries have launched their own CBDCs, 15 are piloting, 26 are developing and 46 are researching. This trend appears to have reached the UAE, with the country’s central bank collaborating with various international agencies.

In 2019, the Central Bank of the UAE (CBUAE) piloted a wholesale CBDC project with Saudi Central Bank named of “ABER.” A final report was published in 2020, which showed that “the distributed ledger technology would enable central banks to develop payments systems at both local and cross-border levels.”

More recently, the CBUAE — along with the BIS Innovation Hub Hong Kong Centre and the central banks of Hong Kong, Thailand and China — implemented Project mBridge, a joint initiative experimenting with cross-border payments using a custom-built common platform based on distributed ledger technology (DLT) upon which multiple central banks can issue and exchange their respective central bank digital currencies.

H.E. Khaled Mohamed Balama, governor of the CBUAE, commented on the mBridge successful pilot by saying, “We will continue to establish the right governance framework for interoperable CBDCs to deliver tangible benefits to UAE companies and consumers.”

The CBUAE and its work on the digital currency could mean that a CBDC may be issued in the near future, but how close in the future is still unknown. The launch of a UAE CBDC will depend on various factors, including the ability of CBDCs to resolve issues of privacy, blockchain interoperability as well as economic monetary concerns.

Will the UAE launch a CBDC?

Stanislav Madorski, the senior vice president of blockchain strategy at WadzPay, told Cointelegraph MENA that given the cost and complexity of executing CBDC pilots, he expects the CBUAE would launch a CBDC.

“UAE has been making strides towards developing a cashless society and is in the top 10 in the world for the most cashless societies with ambitions to be fully cashless within this decade.”

Meanwhile, IBM MENA’s Chief Technology Officer, Anthony Butler, an expert on blockchain and digital assets, saw renewed interest in CBDCs in the region over the last few years, and the mBridge project is reflective of this.

This comes as governments worldwide show renewed interest in launching CBDC projects. In December, Pakistan signed two new laws to expedite the launch of its CBDC. Meanwhile, Spain’s central bank has stated its plans to start a wholesale CBDC project and asked financial institutions and tech providers to submit proposals for the initiative.

Challenges to CBDC launch in UAE

Both Butler and Madorski confirm some challenges that await the CBUAE and other central banks globally in their bid to launch CBDCs.

Madorski sees that while CBDCs have advantages because they are issued by central banks, which have a greater influence on monetary policy and can drive regulatory changes, the biggest challenge will be cross-border acceptance. He explains, “Each country’s blockchain might not be compatible with the other, so interoperability is an issue that we at WadzPay are trying to resolve.” 

Meanwhile, Butler sees much friction in launching retail CBDCs (rCBDCs), most notably the technical and economic challenges. He explains that if CBDCs are to replace cash, they would need to have the privacy that cash experiences offer.

“This is not only relevant within the boundaries of a country but also in cross-border payments,” Butler says. “There was a lot of consideration given in the UAE Saudi ABER CBDC design to this particular point because other countries could have visibility into transactions of counterparties.”

He also notes there are obstacles in moving past the “zero bounds” and toward the introduction of negative interest rates.

In addition, Butler emphasizes there are also structural implications of rCBDCs because if the general public has access to central bank money they no longer need to work with the commercial banking sector.

He emphasizes, “If you replace cash with rCBDC, then there are questions of how to ensure the ability to perform offline payments when someone isn’t connected to the network.”

The future is hybrid

It is plausible that the CBUAE could follow suit and issue stablecoins and a CBDC. Butler believes that several countries are exploring the different aspects of CBDC, like retail and stablecoins. He said these assets have been made available by the commercial banking sector. As he explains, “This will mitigate some of the well-known risks facing CBDCs.”

Madorski confirms that central banks, including Hong Kong, are looking at a hybrid model that would include both stablecoins and CBDCs. He states, “The hybrid model is allowing easy digital currency acquisition both locally and abroad, as stablecoins are readily available on many global exchanges. This model is definitely feasible in the UAE.”

UAE could follow in the footsteps of Singapore and launch something similar to Ubin, which is exploring the use of CBDCs for cross-border currency transactions, the Bank of Japan, which is rolling out a pilot program for its CBDC project to three major Japanese banks in spring 2023, or even India.

But out of the central banks experimenting with CBDCs, the People’s Bank of China leads the race. The Bank will expand the rollout of digital wallets for its e-CNY digital currency to several developed provinces by the end of 2022. It has already recorded $13.9 billion in e-CNY digital transactions and 260 million app downloads.

Whatever the use case, the CBUAE appears to be one the most promising countries in the MENA region when it comes to a CBDC launch, followed by Saudi Arabia, which recently hired a virtual assets and CBDC program lead.

While it’s still unclear when this will happen and what type of CBDC will be launched, the UAE inevitably will have to embrace CBDCs in its effort to build its crypto economy.

Dubai developer MAG is accepting stablecoins in property transactions utilizing the services offered by Bahrain-based crypto company CoinMENA. Stablecoins USDT and USDC will now be accepted by MAG in response to investor demand, the developer said.

Talal Moafaq Al Gaddah, senior executive vice chairman of MAG, which recently announced an $817 million “bio living” residential development in Meydan, Dubai,stated, “As a catalyst for Dubai’s real estate industry, we will spare no effort to progress upon the emirate’s digital economy and consolidate its prominent global position.”

This is the second real estate developer to team up CoinMENA. Last month it partnered with Carlton Real Estate, a Bahrain-based real estate agency, allowing investors to purchase real estate property using crypto assets. Under the partnership, the real estate broker would accept stablecoins like USDT and USDC.

 Talal Tabbaa and Dina Sam’an, founders of CoinMENA, a crypto asset service provider, said the agreement showed the growth of crypto adoption in acquiring ‘real world’ assets.

UAE investment firm specializing in digital assets and blockchain technology, MorningStar has invested 5 million to open its first interactive and immersive digital art gallery, called ‘37xDubai.

The NFT digital art gallery is located in the Burj Daman Tower (DIFC area), 37xDubai will be at the heart of Dubai’s business and lifestyle center as it opens its doors in Q1 of 2023.

As per the press release, the global NFT market is projected to reach 23.9% between 2022 and 2028. In the UAE, 23% of people own at least one NFT, ranking the region first compared to Europe (8%) and the U.S. (2.8%). MoMa, Sotheby’s, and other institutional players in the art scene have also opened NFT or Metaverse-related initiatives or shown interest in the space over the past years.

37xDubai aims to be a bridge across Art and Technology, thereby bringing a new concept to the market focused on web3 education, traditional art, digital art, entertainment, and community.

Featured artists will be able to leverage Morningstar Ventures’ and 37x’s network and expand their reach by engaging with a new trip of web3 enthusiasts. Furthermore, the modular technology behind the 37xDubai gallery allows for frequent changes in exhibited collections, keeping the creative space ever-changing and adaptable to various concepts.

Clemence Cazeau, CEO 37xDubai stated, “The design and architecture of our gallery are highly sophisticated, filled with state-of-the-art equipment, interior, sound, and lighting infrastructure. We hand-picked and meticulously selected every element of the space to ensure that the 37xDubai gallery and its exhibitions could be presented in an unforgettable fashion to every one of our visitors” 

In January 2022, MorningStar  launched its first project out of its Elrond Dubai incubator. The Open Metaverse data platform, Itheum seeks to transform personal data into tradable asset. UAE Morning Star will be leading Itheum’s 1.5 million USD seed fund round and help to built the team for the project on Elrond Blockchain.

Then in February 2022 the investment firm  partnered with Deep-tech startup Humans.ai . As per the press release, the move will deepen Humans.ai’s presence in the Middle East region and advance the company’s mission to establish the first framework for ethical AI with blockchain technology. Humans.ai also partnered with UAE Deca4 consultancy. 

In 2021 MorningStar acquired porfolio tracking application CoinFy. 

Oman Ministry of Transport, Communications, and IT in partnership with Green Data City (GDC) the next generation data blockchain ecosystem, have launched the first licensed sustainable crypto mining datacenter in Oman, and the GCC.  The delegation witnessed the first Bitcoin officially mined in Oman using immersive cooling technology which will reduce electricity consumption.

The crypto mining datacenter is based in Mirbat  Salalah Oman because of its cooler climate. Under this license, industrial mining companies can now register directly with GDC Mining and operate within the development.

H.E. Said bin Hamoud al Maawali, Minister of Transport, Communications and Information Technology, inaugurated the Sultanate of Oman’s first crypto mining data center, set up by Green Data City. Al Maawali was joined by Dr. Ali bin Amer al Shidhani, Under-Secretary of the Ministry of Transport, Communications and Information Technology for Communication and Information Technology, Shaikh Suhail bin Mohammed al Khathiri, Deputy Wali of Mirbat, Talal al Aufi, CEO of OQ, and Olivier Ohnheiser, CEO, Green Data City.

Bitmain, Bitfield, BBGS and Enegix representative were present as well.

Green Data City will develop in two phases. The first phase of development consists of 200MW of mining capacity; the second phase will reach 400MW hyperscale data center capacity, and develop downstream activities including renewable energy, hydrogen, sea-water A/C (SWAC), desalination, food industries and cosmetics. Real estate and hospitality investments will join the development of the new hub, and create the next generation sustainable hyperscale data eco-system in the region.

Large scale mining companies and data center owners can now register directly under the GDC license and operate in the development. The capacities will be allocated in the coming weeks. Al Maawali stated, “The Ministry of Transport, Communications and Information Technology seeks to build cooperative partnerships with leading local and international private sector entities in the various types of digital technologies, as the Ministry works to attract foreign investments in this ever-developing industry.”

Olivier Ohnheiser, CEO of Green Data City, added “The south of Oman is strategically positioned  on the network routes and has unique advantages to establish successful and sustainable hyper scale data centers, such as stable economy, large surplus electricity, cool weather in the Salalah region, unique access to cold deep ocean water next to the shore, and high renewable energy.”

On the website, H.E. Ali Shidhani,  Undersecretary for Communications and Information Technology, Ministry of Transport, Communications and Information Technology “The Green Data City project has the potential to strengthen the Country’s position on the Data Processing and Blockchain markets, while creating qualified jobs and developing unique green data centers”

Olivier Ohnheiser CEO, Green Data City states on the website,“ Oman is a haven of peace, and the South is a hidden gem. Its natural advantages eclipse other locations in the region like Dubai or NEOM city, in terms of political stability and neutrality, temperate climate, cold water availability and natural wonders. The country is supporting Data and Deep Ocean industries with large and stable power supplies, backed by long term agreements. We could not have hoped for a better environment to implement this vision.”

This comes after Oman’s sovereign wealth fund took an equity stake investing $350 million in US firm Crusoe Energy which uses flared and stranded natural gas to mine crypto. Crusoe was supposedly opening an office in Oman after the investment to deply generators and mining equipment for capturing gas at well sites.

The region has become a hot bed for crypto mining, with UAE making advancements in this area. But as one notes from the comments of CEO of Green Data City, it also seems NEOM city in KSA are working on something similar.

UAE startup Educatly, a platform connecting students to global higher education opportunities based out of in5 Tech, a business incubator by TECOM Group PJSC, is implementing a blockchain solution for student data verification, which is essential for them to provide legitimate students records to relevant universities.

As per the announcement, the Blockchain data verification solution is also crucial for foreign students who want to further their education overseas because it might be challenging to obtain original copies of their degrees elsewhere.

In the third quarter of 2022 Educatly’s community of students increased by five times, from 100,000 to 500,000 in the past nine months and represents more than 150 countries and territories.

2022 has been marked by several milestones for the tech start-up, which was founded by former LinkedIn employees in 2020. Educatly has cast a wider net across the higher education industry to feature more than 3,000 universities on its platform and secured active recruitment agreements with 500. It also welcomed Head of LinkedIn’s MENA and EMEA growth markets, Ali Matar, to its Board of Advisors just last month.

Educatly Founder & CEO Mohmmed El Sonbaty stated,  “We are thrilled that the global appetite for transnational student education has bounced back since the pandemic. Our unique platform is providing students with the opportunities to study abroad and enroll at leading international universities around the world. We have seen a spike in interest in students joining our platform from the UAE and we are witnessing further growth in Dubai emerging as the next international higher education destination.”

On behalf of in5, Majed Al Suwaidi, Senior Vice President of Dubai Media City, added: “At in5, we seek to foster a thriving community for smart individuals; a space where they can obtain valuable advice from mentors and advisors and transform their aspirations into businesses with sustainable growth. Expanding the reach and influence of start-ups is a top priority – that’s why one of our key goals is to facilitate access to potential investment. We are proud to have Educatly as one of in5 tech’s start-ups as they have demonstrated impressive growth despite launching their business amid a global pandemic. Educatly’s new software-as-a-service (SaaS) demonstrates their strategic alignment with UAE’s Digital Transformation, Sustainability, and other initiatives. Their presence at in5 gives us the opportunity to showcase the diversity of promising start-ups in our city and region, while providing the most extraordinary with a global platform for their unique ideas.”

Educatly’s new software-as-a-service (SAAS) had a helping hand in its growth by increasing the monthly recurring revenue for more than 28% month over month. Its built-in coding and design implements a smart recommendation feature using a special matchmaking algorithm that links students to relevant degrees, universities, and countries according to their requirements.

The system automatically informs the university partners of new leads and profiles to facilitate student recruitment. This unique feature is vital to the networking effect of building Educatly’s social media platform.

UAE DMCC, Dubai Multi Commodities Centre, has launched the DMCC Gaming Centre in support of the increasingly growing global and regional video games industry. Members of the center who are developing blockchain games will be able to access $150 million funding from VC firm Brinc. Currently standing at USD 1.8 billion, revenues generated by the gaming industry in the MENA region are expected to reach USD 5 billion by 2025.

Launched during the Dubai Esports Festival, the DMCC Gaming Centre formalizes DMCC’s efforts in the gaming and esports space, creating a supportive environment in which all gaming and esports companies can thrive. DMCC is currently home to over 50 gaming companies, from game developers and producers to esports teams and tournament organizers.

The DMCC Gaming Centre will be based in DMCC’s free zone, providingaccess to a vibrant community of gaming industry peers to unlock new opportunities for collaboration. Gaming companies looking to expand their global reach and connect with audiences across the world will also benefit from DMCC’s fully digital setup process, world-class infrastructure, and commitment to increasing the ease of doing business.

 Under the DMCC Gaming Centre, members will have access to the wider esports community through regular events and esports tournaments and industry support from DMCC’s ecosystem partner YaLLa Esports, a leading esports organization in the UAE. Furthermore, members will have the opportunity to join gaming specific acceleration and market entry programs through our ecosystem partner, AstroLabs, a leading tech ecosystem builder in the MENA region. 

Earlier this year, DMCC partnered with the global VC firm Brinc to provide members with access to USD 150 million in funding through their accelerator programs ZK Advancer and The Sandbox Metaverse. Those programs will also be open to DMCC Gaming Centre members developing games on blockchain and web3 technologies.  

 “Gaming is one of the fastest growing industries in the world, with nearly 3.2 billion people playing and spending a combined total of USD 196.8 billion in 2022. The size and growth of the industry today is staggering compared to when video games first appeared in the 1970s,” said Ahmed Bin Sulayem, Executive Chairman and Chief Executive Officer, DMCC. “These passionate communities are constantly looking for greater immersion and storytelling in their chosen form of entertainment. As our roster of gaming companies expands rapidly and as we see more of our DMCC Crypto Centre members enter the blockchain gaming space, there is no better time to formalize our efforts by opening the DMCC Gaming Centre. Through this facility, we will solidify Dubai’s position as a global hub for all forms of gaming and esports.”

Prior to this announcement UAE Cypher Capital and Phoenix Group  invested with others into the new blockchain Web3 gaming platform, Fenix Games. Led by a group of industry veterans from gaming, blockchain, and financial markets, Fenix Games plans to acquire, invest, and publish both existing games and blockchain games of the future. Cypher Capital also invested $1.5 million in Rekt Studios which is also taking Web3 gaming to a new direction.

Fenix Games is a next-generation games publisher facilitating the transition of the next billion gamers into a blockchain-integrated future. Whereas traditional, “Web 2.0” games have mature distribution platforms and markets that bring billions of players and developers together, Web 3.0 lacks the infrastructure, tools and support to facilitate mass adoption. As more and more quality developers embrace blockchain technology and design principles, we see an opportunity for the role of Publishing to elevate its value in the design, go-to-market and operations of games.

At the time Munaf Ali, CEO at Phoenix stated, “Despite the recent challenges in crypto, Cypher Capital Group remains optimistic and bullish about the future of web3 and blockchain projects.”

The second annual conference Decipher, by the Algorand Foundation is being held today until the 30th of November at Madinat Jumeirah Conference & Events Centre in Dubai, UAE.  The Algorand Foundation’s mission is to grow and empower the ecosystem around Algorand-the leading carbon-negative Layer-1 blockchain-and Decipher’s programming will highlight top founders and investors from both within and beyond the Algorand network.

The event will witness more  than 120 speakers across four stages and 50 sessions. Registrants will also be able to sign up for one-on-one mentoring with blockchain leaders, learn to set up wallets and experience play-to-earn games, explore a high-end curated NFT art gallery, take part in hands-on workshops designed for developers and led by the engineers and product leaders behind the Algorand protocol, and more.

Topics include Financial Inclusion at Scale: A World Tour featuring Sanzar Kakar, Founder of HesabPay; Victor Mapunga, Co-Founder & CEO of FlexFinTx; Abhinav Sinha, Cofounder, Eko India Financial Services; and Matt Keller, Head of Social Impact at the Algorand Foundation.

Also is the topic of Building the Next Crypto Capital featuring Basil Al Askari, CEO & Cofounder of MidChains; Benjamin Ampen, CEO MENA at Kraken; and Jehanzeb Awan, Chairman of the Middle East, Africa and Asia Crypto and Blockchain Association.

As well as the topic of payments revolution featuring  Khaled Moharem, President Middle East at WadzPay; Eduardo Novillo Astrada, CEO & Cofounder of AgroToken; and more to be announced.

In addition topics include Safer Bridges to a Multichain Future featuring Nico Arqueros, Primary Contributor, Milkomeda; Adi Ben-Ari, Founder & CEO, Applied Blockchain; and Hugo Philion, CEO & Cofounder, Flare Network

Venture Perspectives Across the Crypto Landscape featuring Terry Culver, CEO & General Partner at DFG Group; Mona Hamdy, Chief Strategy Officer at Sino Global Capital; Abhinav Pathak, Research Partner at Woodstock Fund; and Ryan Terribilini, Head of Ecosystem Funding at the Algorand Foundation

View the full agenda and speaker lineup at https://www.decipherevent.com

SwissBorg, a cryptocurrency wealth management app, has launched in the UAE, to offer a secure way to invest and earn interest on assets through Web 3.0. The award-winning app’s formula for mass adoption is two-fold, simplicity and automation, to help anyone regardless of age or skills, become a community member. 

As per the press release, SwissBorg brings more than six years of expertise to the UAE, introducing a digital asset management app that takes the guesswork out of crypto investments. 

In the first year of its operation, the organization raised $54 million via a successful Initial Coin Offering across 146 countries from 25,000 individual contributors across the globe. The platform has 700,000 active users across multiple countries, having established strong relationships with various banks with fiat gateways for 16 currencies and credit cards.

 According to Gemini’s 2022 report ‘Global State of Crypto’, 35% of the UAE population have adopted some form of crypto tokens, compared to 17% uptake in developed nations. And of the part of the population that has not yet invested, 32% are likely to purchase crypto in 2023. A third of the crypto owners use it to make in-person purchases at brick-and-mortar retailers, compared to just 19% of owners globally.

Anthony Lesoismier, Co-Founder & Chief Strategy Officer at SwissBorg, commented on the launch, said: “We are pioneering a new era in asset management and private banking supported by blockchain technology and cryptocurrencies assets. We see cryptocurrencies as a serious investment, and our goal is to provide a variety of long-lasting crypto financial products that everyone can use to participate in the largest wealth transition in human history. The UAE serves as our perfect Middle Eastern launch pad because it is the region’s commercial, technological and cultural hub. Our extensive experience will enable UAE investors to make more confident cryptocurrency investments.”

Alexander Fazel, Chief Partnerships Officer added: “The UAE is on a trajectory to becoming the crypto capital of the world by gathering industry leaders from all corners of the globe. At SwissBorg, our goal is to be the bridge between traditional finance and decentralized finance and contribute to a world where one community will reshape centuries of broken finance. We’re at the crossroads of a new era and are forever grateful to be a part of this vibrant community. We are bringing in people from all walks of life and there is nothing more rewarding than having teenagers to senior citizens with the same purpose. SwissBorg will redesign the Bank of the Future layer by layer by educating new crypto investors in the UAE to be a part of this paradigm shift.”

SwissBorg has entered partnerships with local leaders Crypto Oasis in the UAE and is also currently raising funds in the region for a strategic round focusing on short to long-term value creation.  

SwissBorg is also one of first companies to give complete transparency on Proof of Assets and Proof of Liabilities trackable at any time in real-time using blockchain technology, creating new norms to restore trust among centralized exchanges in the wake of the recent FTX incident. 

SwissBorg seperates between custodial service and exchange, as such it does not hold custody of users’ funds and instead uses FireBlocks a trusted custodian with MPC technology.  

Binance, Kraken, LMAX, Bitfinex, and SwissBorg, are connected to the order management system (OMS), which actively searches for the best pricing for its users resulting in the platform becoming their main trading account.

 Users can start investing in three simple steps — upload their personal information and proof of identity, which is completely automated, make a deposit with their credit card or cryptos and they can then start investing.

Bloomberg  just published a piece today November 27th 2022 that is rocking the UAE crypto ecosystem and is one of the most read pieces on Bloomberg as of now. As per the article roughly 4 percent of FTX’s global client base is in the UAE. This comes as no shock. LaraontheBlock had noted in an article on November 11th 2022 that VARA had suspended FTX’s crypto exchange license. The article at that time also noted that FTX MENA users brought in high revenues for FTX and was considered as the third biggest revenue region for FTX. 

Ben Bartenstein the author writes in the Bloomberg article, “Several crypto hedge funds recently launched in the UAE had dumped all of their client money on FTX, forcing an insane struggle to exit the platform before halting withdrawals to avert their own collapse, according to those familiar with the matter.”

The article also notes that roughly 4% of FTX’s global clients are based in the UAE, according to court filings in the company’s bankruptcy case, making it one of the ten most impacted jurisdictions.

The article adds that UAE officials have privately raised concerns about the pace of regulatory approvals that they may have moved too quickly and failed to identify the Three Arrows Capital and FTX blasts, people familiar with the matter said.

It goes on to state that Dubai’s VARA plans to announce its CEO in the coming weeks and intends to hold further consultations with key stakeholders before the end of the year. This information was provided by people familiar with the matter.

What the article fails to mention but was published in a separate piece recently on LaraontheBlock was that VARA is carrying out an investigation into the FTX impact on local UAE Market not limited to FTX MENA alone.

As VARA stated on its platform, ” VARA is following a developing matter involving the potential insolvency and alleged fraudulent behavior of an affiliate of a VASP licensed for participation in the MVP Phase.