Central Bank of UAE and Hong Kong Monetary authority agree to cooperate on virtual asset regulations

Central Bank of UAE and Hong Kong Monetary authority agree to cooperate on virtual asset regulations

The Central Bank of the United Arab Emirates and the Hong Kong Monetary Authority in a bilateral meeting in Abu Dhabi on 29 May, have agreed to enhance collaboration between the two jurisdictions on virtual asset regulations and development.  

In addition, the two central banks facilitated discussions between their respective innovation hubs on joint fintech development initiatives and knowledge sharing efforts. A joint working group led by the CBUAE and HKMA, with support from the relevant stakeholders of the two jurisdictions’ banking sectors, will be formed to take forward the agreed initiatives.

Following the bilateral meeting, the two central banks, joined by senior executives from the UAE and Hong Kong banks, conducted a seminar on key opportunities to pursue between Hong Kong and the UAE. The seminar covered discussions on possible arrangements to facilitate better cross-border trade settlement, how UAE corporates can better utilize the Hong Kong financial infrastructure platforms to access Asia and the Mainland markets, as well as financial and investment solutions and capital markets opportunities in the Guangdong-Hong Kong-Macao Greater Bay Area (Greater Bay Area).

Banks operating in the UAE that participated in the seminar included First Abu Dhabi Bank, Abu Dhabi Islamic Bank, Emirates NBD, Industrial and Commercial Bank of China, Bank of China, HSBC and Standard Chartered, whilst participation from banks operating in Hong Kong included Bank of China, Citi, HSBC and Standard Chartered.

H.E. Khaled Mohamed Balama, Governor of the CBUAE, stated, “We are pleased to have welcomed the Hong Kong Monetary Authority and its delegation to the UAE as we look to build on our central banks’ existing and robust relations. During the day’s discussions, we explored deepening collaboration across several important areas including financial market infrastructure development and mutual opportunities for growth in digitization and technological advancement.”

Eddie Yue, Chief Executive of the HKMA, added, “These events enhanced the collaboration between the central banks of Hong Kong and the UAE in a number of important areas, and provided a platform for financial institutions and corporates from Hong Kong and the UAE to step up exchange and collaboration.  Hong Kong and the UAE are two financial centers sharing many complementary strengths and mutual interests, and there is much room for market participants from these two places to work together and build up the connectivity.”

This is not the first time the Central Bank of UAE has cooperated with Hong Kong Monetary Authority, prior to this they worked on the mBridge CBDC project. 

UAE HAYVN records 19 percent increase in returns on its crypto index fund

UAE HAYVN records 19 percent increase in returns on its crypto index fund

UAE based HAYVN, a regulated digital asset management financial institution, has recorded returns of 19 percent increase on its crypto index fund since its launch in January 2023.

The index fund for cryptocurrency assets offers clients a diversified, low cost, and regulated strategy to invest in.

According to HAYVN CEO, Christopher Flinos, “The funds early success and HAYVN predictions for a positive long-term trend due to our carefully weighted Top 20 portfolio, has seen the HAYVN 20 become one of the leading fund benchmarks in cryptocurrency markets”.

The HAYVN 20 fund has three distinguishing features, first it is limits the maximum exposure to any one digital asset at 10% creating a more balanced portfolio. Secondly the fund rebalances monthly, allowing HAYVN 20  to capture new trends in the market by increasing its investment in the emerging winners as their market capitalization grows, while reducing exposure to cryptocurrencies which are declining in value.

Finally the fund has daily liquidity which gives investors the freedom to change their allocation anytime.

Flinos added, “Investing in the HAYVN Index Fund offers investors an opportunity to gain exposure to broader cryptocurrency markets without having to worry about managing individual coins and allocations themselves. With its initial track record and performance so far, it provides a solid option for those who want sustainable long-term exposure rather than concentration risk individual coins”.

Central Bank of Saudi Arabia and UAE choose R3 Corda for CBDC sandbox pilots

Central Bank of Saudi Arabia and UAE choose R3 Corda for CBDC sandbox pilots

During Corda Day Middle East held on May 11th 2023 in Dubai UAE, speakers from the Central Bank of Saudi Arabia (SAMA) as well as the Central Bank of UAE discussed their CBDC strategies and pilots. Both Central Banks are working with R3 Corda on their CBDC pilot programs, SAMA in its sandbox and UAE Central Bank in their research and development center.

The event as per R3, brought together financial service leaders, technologists and Corda enthusiasts from around the region and the globe. Of the prominent speakers included H.E. Saif Humaid Hamad Al Dhaheri, Assistant Governor – Strategy, Financial Infrastructure and Digital Transformation, Central Bank of UAE and Mr. Mohsen AlZahrani, Virtual Assets (VA) and CBDC program Lead, Saudi Central Bank – SAMA as well as Richard G Brown, Chief Technology Officer, R3.

Al Dhaheri made a keynote address on “Future of Money, CBDC and the Digital Dirham” while AlZahrani carried out the closing Keynote, on the topic of “Wholesale CBDC”

Mohsin AlZahrani told Lara on the Block, “Currently we are working with R3 Corda only for the sandbox experimentation, we have not yet decided on the next phase platform or implementation.”

Farhan Khan, Chief Technology Officer Consultant and advisor in Fintech and Blockchain, who attended the event representing Cykube, spoke to Lara on the Block explaining what he learned about CBDC implementation in UAE and KSA.

Khan explained, “It was an excellent event and very eye opening on how R3 is properly working in the region. What I learned about the CBDC implementation in KSA and UAE is that both are working with R3 but each country has a different approach. Saudi Arabia is working on a wholesale CBDC project for its domestic payment system, while UAE Central Bank is working on CBDC for cross border payments.”

Khan adds, “For example the ABER cross border payment project which was paused might be reutilized in the future as per AlZahrani’s statements at the event. AlZahrani stated that SAMA is utilizing the experience of ABER during the implementation of the CBDC wholesale payment system concept, and there is a chance in the future to use ABER again between KSA and UAE after the experimentation of CBDC wholesale in KSA is completed.”

According to Khan the UAE is working on a prototype with R3 Corda for the digital dirham which is currently under testing in their R&D facility.  

Khan concludes to Lara on the Block saying that R3 Corda has seen a lot of interest because it has very powerful features such as interoperability between blockchain platforms even public ones. He explains, “Fintech entities in both Saudi Arabi and UAE are waiting for the network gates to open, and with the VARA crypto regulations cooking every day we feel the same will be happening in KSA. Corda is the right framework from a technology perspective with its tremendous security, protection, especially when it comes to digitization and tokenization.”

This is reflected in a post by R3’s Chief Technology Officer Richard Brown who states, “Composability and interoperability are critical cogs in the architecture of Corda. With the next generation of Corda, there’s no need to decide on your network model at the outset of a project. Start with a centralized, private network and gradually decentralize over time!”

Brown believes that the success of Corda is because it is a cross-firm shared ledger enabling collaborating parties to transact based on high quality data, without exposing internal data or systems, and with far fewer reconciliation errors. A ledger that could even become the industry’s system of record for some key questions such as ownership of assets (the terms ‘Digital Assets’ and ‘Tokenization’

It is also a permissioning system that provides high identity assurance and gives confidence to regulated entities that they can comply with their legal obligations to know with whom they are transacting. In addition is a  privacy-first design, allowing competitors to trade without revealing sensitive data publicly – only participants in a transaction get to see the details – unlike other blockchain-inspired approaches.

He even goes so far to say that, “We’ve been delighted by how successful Corda has been, far beyond the narrow banking scenarios we originally designed it for. Broadly speaking, we’re seeing it being used to solve four main problems in ‘Regulated DeFi’:”

U.S. OFAC sanctions Dubai Fintech firm and its founder using crypto address

U.S. OFAC sanctions Dubai Fintech firm and its founder using crypto address

The U.S. the U.S. Treasury’s Office of Foreign Assets Control (OFAC) sanctioned 22 individuals and 104 entities operating in 20 countries for their role in facilitating Russian sanctions evasion, including John Desmond Hanafin, Founder of Dubai based Huriya Private, a fintech firm, who has an active Ethereum address included as an identifier on his SDN List entry.

Hanafin is the founder and CEO of Huriya Private FZE LLE, a Dubai-based financial services company also sanctioned today for its role in funneling Russian funds into the UAE. 

According to OFAC’s press release, Hanafin in his role at Huriya has been working since the outset of the Russia-Ukraine War to help Russian nationals protect their assets from sanctions. Much of this activity has involved helping Russian nationals move their money into UAE bank accounts and obtain fraudulent passports. 

As per Chainalysis blog, John Hanafin’s on-chain transactions may shed light on Huriya’s Russian sanctions evasion operations.

OFAC included a single Ethereum address as an identifier on Hanafin’s SDN list entry. That address is 0x38735f03b30FbC022DdD06ABED01F0Ca823C6a94. Since becoming active in January 2022, that address has received roughly $4.9 million worth of cryptocurrency, mostly in Tether (USDT).

According to Chainalysis article, across the 75 USDT transactions received by Hanafin, there were several in amounts with following ranges  $5,000 – $10,000, $15,000 – $25,0000, $100,000 – $150,000.

Chainalysis included some examples of transaction within those ranges on Chainalysis Reactor graph.

While Chainalysis states that they cannot be sure that any of the payments to Hanafin’s wallet reflect citizenship by investment purchasing, they do point out, “ it certainly appears possible given this is a service Huriya offers, and Hanafin’s work acquiring false passports for Russian nationals as described by OFAC.”

Chainalysis adds, “ As for the high-frequency payments to Hanafin’s wallet that came in smaller amounts, it’s possible that those were related to lower-cost services Huriya offers, such as establishment of UAE bank accounts or corporate structuring.”

Chainalysis explains that while crypto may still play a role in Russian sanctions evasion, the transparency of blockchain means that blockchain analysis combined with open source data can open up valuable avenues for investigation. 

Bahrain welcomes digital asset banking services provider Whampoa

Bahrain welcomes digital asset banking services provider Whampoa

The Bahrain Economic Development Board announced that it has welcomed Singapore Based digital asset bank Whampoa Group to Bahrain. Whampoa will be setting up its new digital bank headquarters in Bahrain.

The digital bank, which offers integrated financial solutions to serve institutions, innovators, and sophisticated investors globally, including digital banking services and the trading, custody, and asset management of digital assets, will open its operations in Bahrain by the end of year.

In 2022, Whampoa Group had announced plans to raise $50 million for a crypto hedge fund and had announced plans to set up a venture capital fund to invest in digital assets.

“We are delighted that Whampoa Group intends to set up the headquarters of their new digital bank in Bahrain as they would benefit from Bahrain’s pro-innovation environment and forward-looking regulatory framework. The establishment of these types of institutions is vital to further strengthen the existing digital assets industry and this milestone opportunity directly aligns with Bahrain’s Economic Recovery Plan, which prioritizes digitization across the financial services sector,” Khalid Humaidan, EDB CEO, said.

“We were impressed by Bahrain’s solid reputation in the financial services sector, transparent regulatory framework, and ongoing pledge to collaborate and innovate. We are committed to providing secure and innovative digital financial solutions in line with global best practices and are confident that our digital bank will set a new benchmark for the industry. Whampoa is grateful for the support from the Bahrain EDB and the broader Team Bahrain ecosystem throughout the entire process.” Shawn Chan, Group Chief Executive Officer of Whampoa Group commented.

MENA open banking platform Tarabut gateway raises $32 million to expand in KSA

MENA open banking platform Tarabut gateway raises $32 million to expand in KSA

MENA based Tarabut open banking platform, which recently signed its first partnership with a crypto brokerage exchange RAIN in Bahrain, has raised $32 million in its series A, led by Pinnacle Capital. The funds will be used to bolster Tarabut’s footprint in Saudi Arabia.

Pinnacle Capital is a leading alternative investment firm that focuses on KSA investments to provide unique alternative investment opportunities. Pinnacle Capital partners have extensive transactional experience in the venture capital industry with a proven track record, including leading the first Saudi unicorn tech startup, Jahez, to a public listing. The raise also saw participation from Aljazira Capital, Visa, Tiger Global, and other leading existing investors.

Abdulla Almoayed, Founder and CEO of Tarabut Gateway, stated, “Open banking is reshaping the financial landscape in KSA and the wider Middle East, and we, at Tarabut Gateway, are proud to be at the forefront of this innovation. This fundraise reflects the potential of open banking, our advanced technology, and the trust placed in us by our partners both in KSA and globally. Tarabut Gateway’s mission is to create an open financial services sector that delivers open banking benefits to MENA’s consumers, banks, and fintechs – and the proceeds of this fundraise will help us execute our strategy and contribute to realizing the Kingdom of Saudi Arabia’s ambitious vision 2030.”

In KSA, Tarabut Gateway has achieved over 60% market coverage through partnerships with leading banks such as Alinma Bank, Arab National Bank, Saudi National Bank and Riyad Bank. The Saudi Central Bank (SAMA) has included Tarabut Gateway as one of the first participants in its Regulatory Sandbox, which is a key component of the open banking framework rollout.

Tarabut Gateway will also be partnering with Visa. Andrew Torre, Regional President of Visa CEMEA, said, “Next-generation digital experiences and innovation are driving the future of financial services, and open banking is a growing movement that can help consumers better access and manage finances. We look forward to partnering with Tarabut Gateway, combining our global payments network and proven local solutions with their open banking platform to allow innovative financial services across the region.”

Abdulwahab Al Betairi, Founding Partner of Pinnacle Capital, added, “We’re thrilled to be backing Tarabut Gateway’s ambitious growth plans. Their innovative approach to open banking and their strong focus on Saudi Arabia make them a perfect partner for us, and we’re excited to see them grow to new heights and contribute to the growth of the Saudi Arabian fintech space as part of the Vision 2030 strategy.” 

Prior to this announcement, Tarabut Gateway partnered with Rain. As per the announcement it would brig faster, cost effective fiat to crypto transaction to Bahrain end users and enable funding payments directly from user bank accounts without leaving Rain’s platform.

The new feature will utilize Tarabut Gateway’s open banking payment solutions to facilitate on and off-ramp (fiat-crypto-fiat) transfers for users, dramatically increasing speed and reducing errors associated with traditional bank wire transfers.

Abdulla Almoayed, Founder and CEO of Tarabut Gateway, stated at the time that crypto trading, crypto wallets and other blockchain use cases were a natural ally in opening up traditional banking and finance. He stated, “We’re delighted to unveil a solution that aims to make fiat-to-crypto transfers quicker, more secure, and cost-effective – as well as enable such funding methods directly from bank accounts. We are proud to partner with Rain to provide a user-focused approach to crypto services by bringing the advantages of open banking digital solutions.”

Blockchain Integration Cloud platform launched in MENA region

Blockchain Integration Cloud platform launched in MENA region

Blockchain compatible EVM ( Ethereum Virtual Machine) platform built on NEAR protocol, Aurora Labs, with offices in Business Bay in Duba, has launched its Aurora Cloud in the MENA region.

The platform is designed to integrate blockchain technology to their business without friction or the need for expert teams, significant resources, or large investments in time. With Aurora Cloud, businesses can connect their existing products to their own blockchain, allowing for a seamless end user experience that still looks familiar to what their customers use every day.

The platform enables businesses to choose to operate on their own private blockchain, known as an Aurora Silo, implementing KYC/KYB access restrictions and dictating which apps and tokens are available to trade and use, allowing for a bespoke and tailored experience. The ability to control whether they or their customers are responsible for gas fees is another game-changing feature that provides total commercial flexibility and a strong incentive to both businesses and their consumers.

Whilst Aurora Cloud is largely an industry agnostic solution that can provide blockchain benefits across a wide range of industries, the company sees significant benefits for Fintech companies, brokers, banks, investment funds, the energy sector, and those operating within the luxury goods and retail spaces.

“The launch of Aurora Cloud is an exciting moment for Aurora Labs and the wider blockchain industry. With our unique products and innovative approach, we are breaking down the technical barriers and increasing the transition of traditional businesses to the blockchain,” said Alex Shevchenko the CEO of Aurora Labs. “We are confident that Aurora Cloud will position us at the forefront of this shift and provide the industry with a much wider pool of potential customers and partners.”

Aurora raised $12 million in October of 2021. 

UAE based WadzPay chosen as finalist at Currency Research Awards for its Blockchain enabled Saudi Hajj Payment solution

UAE based WadzPay chosen as finalist at Currency Research Awards for its Blockchain enabled Saudi Hajj Payment solution

UAE based WadzPay Blockchain enabled Hajj Pilgrim Digital payments solution has been chosen as a finalist at Currency Research’s second annual Advancement in Digital Currency Awards, being presented at the Digital Currency Conference in Mexico City, on May 18th, 2023. WadzPay’s solution was chosen under the category for Best Innovation in Digital Currency. WadzPay is competing against top international blockchain fintech providers such as Stellar.

According to Parv Aggarwal, Vice President for CBDCs and Partnerships, “We are super excited to represent WadzPay and our novel cross border Hajj Pilgrimage token.”

Currency Research awards are presented to digital currency initiatives that advance the platform as a payment instrument. Currency Research chooses entities who are working on all types of digital currencies at all stages of developments.

The award categories include “Outstanding Advancement in Digital Currency” whose category finalist for this year include, Crunchfish,  eCurrency,  and FNA.

The second award category is “Best Innovation in Digital Currency” which recognizes outstanding innovations in the digital currency space, including new platforms, products, or apps that have the potential to transform the way we use and interact with digital currencies, including central bank digital currencies (CBDCs).

The category is open to innovations that have launched and have customers, and that offer users a unique and valuable way to access digital assets, crypto, DeFi, or other related financial      services, including CBDCs. Innovations that offer greater security, transparency, and scalability in the digital currency space, or that leverage emerging technologies such as AI, will be given special consideration. The judges will consider factors such as the level of innovation, the potential impact on the industry, and the ability of the innovation to scale and reach a wider audience.

WadzPay, Currency Network, and Stellar will be competing as finalists for this category.

Other award categories include Best Financial Inclusion Initiative in Digital Currency. This award recognizes initiatives that have been developed to promote financial inclusion in the digital currency space. This category is open to projects that have demonstrated success in providing access to digital currency and related financial services to traditionally underserved or unbanked populations. This includes initiatives that aim to reduce barriers to entry for low-income individuals, women, and other marginalized communities. 

Jordanian headquartered Fintech solution provider ProgressSoft will be competing against eCurrency, and IDEMIA.

The Best Sustainability Initiative in Digital Currency category will see competition between Andrei Lipkin, Ripple and Stellar

As for the final award category” Digital Currency Leader of the Year” which recognizes outstanding individual who has consistently contributed to the advancement of the digital currency sector, finalists includes Jonathan Dharmapalan, eCurrency, James Wallis from Ripple, and Shiva Bissessar from Pinaka Consulting Ltd.

GEM Digital investment adds $50 million to its $10 million investment in UAE metaverse project

GEM Digital investment adds $50 million to its $10 million investment in UAE metaverse project

Bahamas based digital asset investment firm GEM Digital, which invests in tokens, has added $50 million to its $10 million investment in UAE Everdome Everdome a hyper-realistic metaverse that will bring brands and people together.Everdome had also received investment from BNBChain, OKx, and Unreal engine.

Everdome will use the proceeds of the investment to boost infrastructure and allow heavy traffic loads in a high-fidelity environment. As per Everdome announcement the first $10 million received from GEM Digital has already been drawn down by Everdome for the development of the metaverse project.

GEM’s increased investment commitment follows Everdome’s recent change of management in appointing Jeremy Lopez as CEO, and clearly demonstrates their strongest support of the new management’s previous track record and commitment to the vision of our project moving forward.

Jeremy developed the relationship with GEM during his previous role as COO, while also assisting in the partnership with Alfa Romeo F1 Team and securing OKX as a key strategic partner.

Investment will be completely focused on the fundamentals necessary to take Everdome to the next level of success, including product development, scalability and growth. These fundamentals include core product delivery, to ensure Everdome opens to the public as soon as possible, infrastructure boosting to allow heavy traffic loads in a high-fidelity environment, tools for users to create and build inside Everdome as well as growth in users and partners.

GEM‘s investment comes in the form of a further structured token subscription agreement. Everdome will control the timing and the number of drawdowns under this facility, and has no minimum drawdown obligation.

At its discretion, Everdome has the ability to sell up to 200% of their average daily volume, in tokens across multiple exchanges to GEM Digital.

Everdome CEO, Jeremy Lopez stated, ‘’The expansion of the investment commitment from GEM Digital is a huge show of faith in Everdome’s concept, our growth to date, and the capacity of the management team to quickly scale the company across multiple fronts, in marketing, infrastructure, product releases and partnership acquisitions, taking Everdome from concept to a business with real ROI and a vibrantly active metaverse community on a global scale. GEM has been much more than a financial partner; they have been supportive throughout our partnership discussions and have helped open doors with new partners and exchanges.’’

Qatar’s Financial Center Authority just signed a second MOU for blockchain and digital assets

Qatar’s Financial Center Authority just signed a second MOU for blockchain and digital assets

Once again the Qatar Financial Centre Authority (QFCA) financial business center is on a sprint run with Blockchain, first with its MOU signed with Blockchain solution provider R3 and now with its MOU signed Blockchain SettleMint platform. The agreement with Settlemint will also as with R3 work on Blockchain and digital asset initiatives in the financial sector. 

The MoU aims to explore potential synergies with industry participants, including financial institutions, fintech firms, and corporate organisations, to accelerate the adoption of blockchain and digital asset business models and solutions.

Yousuf Mohamed Al-Jaida, Chief Executive Officer, QFC, stated “We are delighted to collaborate with SettleMint Blockchain LTD to explore use cases of blockchain technology and digital assets in Qatar’s financial industry. This partnership reflects the QFC’s commitment to supporting innovation and identifying new opportunities that benefit our stakeholders and Qatar’s wider financial ecosystem. To that end, we look forward to future joint initiatives with SettleMint.”

Matthew Van Niekerk, Founder & CEO, SettleMint, added, “At SettleMint, we are passionate about empowering developers to easily build on web3 infrastructure and enabling companies to unleash the full potential of blockchain technology for their clients and the ecosystems in which they operate. SettleMint has been supporting the financial industry for several years from experimentation to production application. We are thrilled to partner with the QFC and leverage their expertise and network to drive blockchain adoption and innovation in Qatar’s financial sector.”

Settlemint was one of the first blockchain companies to set up shop in the GCC region back in 2016. By 2021, Settlemint was in discussions in Bahrain and UAE with government and private sectors alongside their partners in the region. 

Settlemint was collaborating on projects in supplychain, finance and banking sectors. 

At the end of 2022, SettleMint raised $18 million in Series A funding led by Molten Ventures. The raised funds were to be used to solidify their position in Europe, Middle East, India and Singapore as well as expand into the Japanese market.