Saudi Arabian unified national platform for government services recently carried out an interesting survey on twitter. It posted a general consultation request by the Ministry of telecom, Space and IT with regards to which emerging technology would citizens of Saudi Arabia like to see implemented in KSA.

People were asked to choose between IoT (internet of things), Blockchain, 3D printing and VR/AR/XR. 7895 votes were casted with 49 percent of them choosing IoT, with 10 percent choosing blockchain, 16 percent choosing 3D printing and 24 percent choosing VR/AR/XR.

This is interesting and shows that Internet of things and AR are the most popular emerging technologies among those who voted. In addition it seems that the Saudi government is interested in these four technologies.

This comes at a time when the Saudi Central Bank is moving forward to CBDCs, digital assets, and more. In addition recently many blockchain use cases have been launched in KSA.

But more eye opening is the recent news about UAE government and IOT Blockchain platform IoTa. Could this mean IOT and Blockchain will be the next use cases both in UAE and KSA?

In a recent tweet, Qatar’s AhliBank warned customers against, trading, buying and selling virtual assets and currencies through accounts and banking services, citing the reasons as being associated with high risks.

According to the statement, “The regulators have banned trading, buying and selling virtual assets and currencies through accounts and banking services, as they are associated with high risks. Please be careful and don’t deal with any person or entity that provides trading services in virtual assets and currencies through your bank account and banking services, to avoid any risks that may arise as a result of trading in these virtual assets and currencies. “

The statement reflects the growing interest in clients for trading in virtual assets, while the regulatory authorities in Qatar specifically the Central Bank have yet to regulate this sector or introduce crypto exchange licenses. 

In 2022, CoinMENA, crypto broker exchange had announced that it was now serving clients in Qatar, as does Binance and other international crypto exchange platforms. 

Yet Qatar has been moving forward both in Blockchain, DLT, and digital assets with the recent news coming from Qatar Financial Authority Center which has just finalized its digital assets framework.

The Jordanian government has commissioned the United Nations Economic and Social Commission for Western Asia (UNESCWA) Economic and Social Commission for Western Asia to draft a national blockchain policy for Jordan.

As a result the UNESCWA is hiring a consultant from Jordan to work remotely on drafting a national Blockchain policy for Jordan. The application for the job will be closed on June 14th 2023.

As per UNESCWA, The project should be finalized within 4 months; UNESCWA explains that Arab countries need to develop their Blockchain national plans to meet the requirements that were brought forth by the digital age.

In addition UNESCWA stated, “The Ministry of Digital Economy and Entrepreneurship (MoDEE) in Jordan requested UN-ESCWA’s assistance to develop the national policy for blockchain. The provision of this advisory service is the subject of these terms of reference.”

The report will include reviewing best regional and international practices on Blockchain policies, strategies and frameworks (at least 4 international and 4 regional practices); analyzing the different existing policies and frameworks related to digital technologies in Jordan; holding interviews with the various stakeholders and summarize their remarks and observations; suggestion of the needed national policy in Jordan based on the gap analysis and national needs.

Saudi Islamic Development Bank Institute (IsDBI) is collaborating with the blockchain entity SettleMint to develop a Smart Stabilization System (SSS), an algorithm that aims to maintain the stability of assets traded on organized markets, including financial assets or digital currencies.

SettleMint has more than 60 Enterprise blockchain implementations worldwide. It offers a full-fledged Blockchain-Platform-as-a-Service solution. IsDBI, as the knowledge beacon of the IsDB Group, leads the development of knowledge-based solutions. The Institute has already secured patents for its three innovative fintech mechanisms with great potential for the financial industry.

The objective of the SSS is to help stabilize organized asset markets without compromising efficiency. This is done by managing the gap between supply and demand to reduce the volatility of the price while maintaining the role of the gap in equilibrating the market. The patent-pending Smart Stabilization System is unique in managing the pressure on price before the price changes. The System is forward-looking, while most other stabilization systems are backward-looking. Moreover, the SSS is self-financed, and investors’ rights are fully protected.

IsDBI and SettleMint are investigating the use of blockchain and smart contracts to provide autonomous and transparent execution of the SSS.

Mr. Matthew Van Niekerk, the CEO of SettleMint, stated: “International trading activity has been the cornerstone of economic growth and prosperity for thousands of years. As we find ourselves in times of significant economic uncertainty, it is an honor to support the Islamic Development Bank Institute on the design and implementation of new mechanisms that can enhance the stability, transparency, and efficiency of trading activities globally.”

Dr. Sami Al-Suwailem, the Institute’s Acting Director General, welcomed the collaboration on this project as a milestone in the progress of the Islamic fintech industry. He said: “The world is moving fast on the digitalization of financial transactions. This requires a robust stabilization system in place to minimize the instability associated with fast movements of funds, as has been proven by the recent banking crisis. I am pleased that my colleagues are capitalizing on the patent-pending Stabilization System to develop a practical solution to assist our Member Countries in achieving digital transformation with minimum financial instability.”

World Economic Forum report entitled “  Pathways to the Regulation of Crypto-Assets”  says UAE crypto asset regulatory framework is an agile one,  defining it as flexible, iterative and proactive which is beneficial because it is flexible, appreciate market maturity and ecosystem development.

According to the WEF report, regulators that fall under this model include the Swiss Financial Market Supervisory Authority. FINMA’s token classification prescribes three simple categories: payment tokens, utility tokens and asset tokens. The framework acknowledges hybrid tokens and that a token’s classification may change over time. Following the first classification, FINMA later also published further guidance in

Also included as per the report are the regulatory sandboxes in the EU and India in addition to the UAE. 

Instead of prescribing and enforcing rules, agile regulation adopts a responsive, iterative approach, acknowledging that policy and regulatory development is no longer limited to governments but is increasingly a multi-stakeholder effort. Yet it also faces challenges that include the need for coordination and collaboration being as well plagued with uncertainty. 

Regulatory sandboxes, guidance and regulators’ no-objection letters are all forms of agile regulation that enable the testing of new types of solutions, iterating policy frameworks based on ecosystem evolution and industry needs.

The report sets out to understand and highlight the needs and challenges in developing a global approach to crypto-asset regulation. In doing so, it delves into the various regulatory approaches being adopted by different jurisdictions.

The report developed rankings for each regulatory framework. The rankings covered four areas when analyzing regulatory frameworks and found that the agile regulatory framework is best at promoting innovation. Agile regulatory framework ranks in the middle ground for providing certainty for businesses, addressing data gaps and enforcement effectiveness.

The report finds for example that Regulation by enforcement which the USA falls under is weak in all the above mentioned areas except for enforcement effectiveness.

As per the report the UAE has not only initiated a license regime for crypto assets, but has also carried out consultation for decentralized applications such as DeFi, and DAOs.

In addition the report mentions that few jurisdictions have chosen to address the difficulty of classifying tokens, partially relying instead on the functionality enabled by the token.

For example, Liechtenstein has chosen not to rely solely on classifications but to introduce the token as such as an element in Liechtenstein Law, meaning that the right or asset represented in the token triggers the application of special laws (the so-called “token container model”). This means that the tokenization as such has no legal effect: if a financial instrument is tokenized, the financial market laws are applicable if the activity is regulated, too; if a commodity is tokenized, the laws for commodity trading might be applicable; and so on. For new instruments, such as utility coins and virtual currencies, a new regulation has to be defined.

While in the UAE, the Virtual Assets Regulatory Authority in Dubai has put forth a framework that is underpinned by overarching regulations and compulsory rulebooks, segregating activities-based rulebooks to rapidly account for novel products, emerging technologies, and new business models that require regulatory capture.

The paper’s findings reinforce the urgent need for policymakers and regulators to collaborate with industry and users to realize the benefits while addressing the risks involved.

Enforcement is still weak globally. For example in the context of AML supervision of crypto-assets, a Bank for International Settlements (BIS) 2021 survey found that oversight remained nascent globally. As stated, “Although many are at different stages, with some countries still finalizing applicable law and policy and a small portion engaging in active supervision, by and large effective enforcement measures remain a work in progress. The result is a complex tapestry of enforcement trends as well as enforcement risks posed by the cross-jurisdictional influence of crypto-assets.”

Even when it comes to the FATF travel rule implementations are also limited. As noted in FATF’s June 2022 targeted update report, interoperability across technical solutions and across jurisdictions is still lacking.

WEF report as such notes that such fragmented enforcement techniques will pose a challenge to the supervision and monitoring of crypto-assets against regulations in the short term and may take many years to standardize.

The report recommends promoting a harmonized understanding of taxonomy/classification of crypto assets and activities, set out best practices and baseline regulatory standards for achieving the desired regulatory outcomes and encourage passportability of entities and data sharing.

Building on this foundational paper, the World Economic Forum’s Blockchain and Digital Assets team will launch an initiative focused on evaluating the outcomes of different regional approaches to regulation. This effort will convene public- and private-sector leaders to reveal first-hand learning’s and the unintended consequences.

But not everyone shares the WEF reports belief that International crypto regulations and standards are possible.  During the Qatar Economic Forum this week, Peter Smith Co-Founder and CEO of Blockchain.com rejected claims of a “United Nations” of crypto as inconceivable. He stated, “A global system to regulate cryptocurrency is unlikely to exist.”

However, the Blockchain chief recalled the recent EU passing of the world’s first comprehensive package as a step forward in cautiously regulating the cryptocurrency industry. In addition, Smith told Bloomberg that regulators that express optimistic calls to crypto would promote development for the industry.

So whether a global harmonic set of crypto assets regulations are formulated or whether regional and national countries work to build their own, the growth of crypto assets cannot be curved by regulators. 

After a meeting between UAE’s UAE Minister of State for Foreign Trade Thani AlZeyoudi and the Founder of Iota, Dominik Schiener, the IoTa Blockchain platform has now been ushered into the UAE’s digital ecosystem. In a tweet on May 25th 2023, Minister Al Zeyoudi states, “Great to meet Dominic Schiener, Co-Founder and Chairman of IOTA and explore ways to introduce their open source blockchain solution to the UAE’s digital ecosystem. With its ability to power a wide range of sectors, it could play a vital role in our advanced technology ambitions.”

This was followed by a tweet by Schiener who replied, “Thank you so much for meeting us Your Excellency Dr. Thani. It’s really inspiring for us to speak with such welcoming and sophisticated leaders like you in the UAE. We are committed to play a key role in the UAE’s continued digital transformation and economic growth.”

IOTA is an open-source distributed ledger and cryptocurrency designed for the Internet of things (IoT). It uses a directed acyclic graph to store transactions on its ledger, motivated by a potentially higher scalability over blockchain based distributed ledgers

On May 18th 2023 in another tweet, Blockchain IOTA Founder Dominik Schiener stated, “It was a pleasure to meet H.E. Abdulla Al Saleh and the team at the Ministry of Economy in UAE today. It’s impressive how they’re leading their digital transformation.”

He added, “We are looking forward to bring IOTA here and create value for the region and the world.”

In the comments it was noted, “Fingers crossed for an ongoing collaboration that propels IOTA to new heights!”

It seems the collaboration is now in full force, welcome Iota to the UAE.

UAE based Web3 Launchpad and consultancy firm has become the Launchpad partner for Boba network to bolster the gaming industry. Together both entities will leverage the strengths and expertise of both organizations. EnjinStarter’ s renowned reputation for providing robust Launchpad services combined with Boba Network’s cutting-edge blockchain technology promises to usher in a new era of innovation and growth.

Announced during 6th Scale event in UAE, EnjinStarter and Boba network shed light on the transformative potential of decentralized gaming. The panelists shared their insights and perspectives on how blockchain technology can drive sustainability, interoperability, and immersive experiences within the metaverse.

Both entities also announced the launch of a new Blockchain gaming project.

EnjinStarter has already supported 70 projects since inception raising a total of $10 million. Since then they have expanded into the MENA region because of its good regulatory environment and innovative infrastructure. EnjinStarter has already received initial approval from Dubai’s Virtual Asset Regulatory Authority (VARA) and are now in the process of obtaining a full license to operate.

During the Qatar Economic Forum organized by Bloomberg, Ola Doudin, Co-Founder and CEO of UAE based BitOasis participated in a panel alongside Yat Siu, Co-Founder and Executive Chairman of Animoca Brands to discuss “Harnessing the Power of Blockchain”

Doudin uncovered during the panel that BitOasis would be the first regulated virtual asset platform in KSA (Kingdom of Saudi Arabia). She stated, “We are working with regulators in KSA to be the first regulated platform in Saudi and other larger markets.”

She also mentioned that BitOasis is in discussions with regulators in Egypt and Morocco. She discussed how in both Egypt and Morocco, citizens are interested in access to tokenized dollars, better known as stablecoins especially in countries with high inflation rates and easy access to these stablecoins. According to her, this is a challenge to regulators and is something they will have to seriously look at.

This comes after BitOasis became the first crypto broker to receive an operational license from Dubai’s virtual asset regulator (VARA). BitOasis has also received preliminary approval for its license in Bahrain.

Interestingly Ola Doudin talked about the GCC’s growing interest in tokenization.

According to Doudin, “One of the biggest applications of interest in the Gulf region is tokenization because it can bring in new industries by tokenizing hard assets into liquid form through blockchain based tokens. We are seeing the Gulf region, KSA and UAE focusing on tokenized securities bringing more liquidity, more transparency from an investment standpoint in a regulated way.”

She adds that BitOasis is ready for tokenization of hard assets as it has already built a regulated infrastructure with the means to buy and sell tokenized assets and as such can support this movement.

She gives the example that in a recent BCG research it stated that in the next 10 years tokenization of assets will be worth $16 trillion.

While Qatar has not opened up to the crypto scene, its financial center is opening up to digital assets enabling them to tokenize asset classes to facilitate the needs of qualified investors with its digital assets framework.

Henk Jan Hoogendoorn, Chief Financial Sector Officer, at Qatar Financial Center Authority speaking to Lara on the Block, stated, “ We are developing our digital assets framework to allow for public tokenization of assets, including securities, bonds, and real-estate.”

He emphasizes that they will not go into crypto, NFTs (Non Fungible Tokens) or commodities at this time.

Hoogendoorn had discussed digitization in the financial sector in Qatar as well as their digital assets project and the new Fintech strategy of QCB (Qatar Central Bank) during a fireside chat on Digitizing the Financial Sector in Qatar, moderated by Robert Wigley OStJ, BSc, Hon DBA.

Furthermore, Aleksander Biesaga, Acting Project Manager, Roland Berger in a recent LinkedIn post noted, “It was a pleasure to speak to the Qatar Financial Centre (QFC) Authority on unlocking a new era of ownership, trading and investment via digital assets and tokenization.”

He was referring to the workshop by Roland Berger on the new digital assets framework for Qatar Financial Centre (QFC) Authority and Qatar Financial Centre Regulatory Authority (QFCRA).

Both entities QFC, and QFCRA, according to Hoogendoorn are developing and will facilitate the needs of qualified investors and investment firms to tokenize asset classes. He states, “We are looking forward to become a jurisdiction of choice.”

So it seems that while Qatar may not be warming up to crypto, it is moving forward  with its blockchain strategy and digital assets. In Q1 the Qatar Financial Authority signed an MOU with Blockchain entity Settlemint to forward digital asset industry and with R3 Blockchain firm for DLT (Distributed Ledger technology)  

UAE digital assets infrastructure company, Zero Two, part of sovereign wealth fund ADQ, has purchased 7.3 million megawatt hours of clean energy from EWEC (Emirates Water and Electricity Company), a leading company in the integrated coordination of planning, purchasing, and supply of water and electricity across the UAE. This is the largest single purchase of Clean Energy Certificates (CECs) to date and the first in the digital assets infrastructure sector.

The purchase agreement was signed by Ahmed Al Hameli, Chief Executive Officer of Zero Two; and Othman Al Ali, Chief Executive Officer of EWEC.

Under the purchase agreement, EWEC will provide Zero Two with clean energy certificates to decarbonize its operations and support the company’s progress against sustainability objectives.

Othman Al Ali, Chief Executive Officer of EWEC, said, “Our clean energy transaction with Zero Two provides EWEC with a unique opportunity to further accelerate the country’s energy transition and decarbonization of industries in line with the UAE Net Zero by 2050 strategic initiative.”

He added, “This first-of-its-kind transaction in the digital assets infrastructure sector, which also constitutes the largest ever single CECs purchase to date, demonstrates both EWEC’s and Zero Two’s commitment to supporting the nation’s sustainability and environmental agenda and is an example of the practical and tangible steps UAE entities can take to decarbonize their operations and address the pressing challenge of climate change.”

Ahmed Al Hameli, CEO of Zero Two, said, “The purchase of EWEC’s Clean Energy Certificates demonstrates our dedication to sustainability and commitment to decarbonizing our digital assets infrastructure. Operating our assets with clean energy enables us to support Abu Dhabi’s transformation into a sustainable economic powerhouse while also contributing to the UAE’s long-term vision of a net zero future.”

Zero Two recently partnered with Marathon Digital to build two  bitcoin mining farms in the UAE.