BitOasis aims to become first regulated virtual asset exchange in KSA as tokenization interest grows across GCC

BitOasis aims to become first regulated virtual asset exchange in KSA as tokenization interest grows across GCC

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.

Qatar Financial Center finalizes digital asset framework to become destination of choice for tokenization

Qatar Financial Center finalizes digital asset framework to become destination of choice for tokenization

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)  

Oman Crowd Funding platform to develop secondary token market after receiving license

Oman Crowd Funding platform to develop secondary token market after receiving license

Oman based Mamun to develop secondary token crowd funding market after receiving license from Oman Capital Market Authority

Oman based Mamun, has been awarded a full crowd funding license by Oman’s Capital Market Authority, with plans to offer a crowd funding token based secondary market utilizing its recent partnership with Fasset token exchange platform.

The recent license is also a pre-approval for a PSP (Payment Service Provider) license by the Central Bank of Oman. As a fintech infrastructure-as-a-service provider, Mamun offers a proprietary technology platform that empowers telecommunication companies, banks, and large startups with the tools and capabilities necessary to roll out fintech services and products, including popular solutions like Foodics.

Excitingly, Mamun has recently announced a strategic partnership with Fasset, a renowned innovator in the field. This collaboration aims to co-create advanced products that further enhance Mamun’s holistic approach to fintech services. By combining their respective strengths and expertise, Mamun and Fasset strive to drive innovation, accessibility, and convenience in the financial industry.

“We are thrilled to have been granted the full crowdfunding license by the Capital Market Authority and the pre-approval for the PSP license from the Central Bank of Oman,” said Mohammed Al Tamami, Co-Founder  and Chief Commercial Officer at Mamun. “These licenses are a testament to our commitment to delivering state-of-the-art fintech infrastructure and comprehensive solutions. We are excited to expand our offerings and partner with industry leaders like Fasset to shape the future of finance.”

The global Tokenization Market size to grow from USD 2.3 billion in 2021 to USD 5.6 billion by 2026, at a Compound Annual Growth Rate (CAGR) of 19.0% during the forecast period, according to a new report by MarketsandMarkets published in May 2023. 

Dubai Virtual Asset regulator CEO speaks on the current and future status of regulations at VARA

Dubai Virtual Asset regulator CEO speaks on the current and future status of regulations at VARA

During DACOM (The Digital Asset Compliance and Market Integrity Summit) hosted by Solidus Labs, a crypto-native market surveillance and risk monitoring hub tailored for digital assets, in Abu Dhabi on May 4th 2023, Dubai’s virtual asset regulator CEO stated that only 50 percent of Dubai’s legacy VASPs (those who were operating before VARA was set up) applying for license at VARA will need to be regulated. He also talked about the opportunity to launch regulation and compliance as a service for small business and entrepreneurs.

Henson Orser, CEO of Dubai’s Virtual Asset Regulatory Authority, VARA, discussing VARA’s licensing journey with strong legal risk compliance, stated, “Currently we have three cohorts that are passing through several processes and routes to being fully licensed, the Minimum Viable product cohort that includes global operators who were with us from day one.  There are also legacy VASPs (Virtual Asset Service Providers), several hundred of them who have been performing virtual asset activities in Dubai before VARA came along. We are in the process of registering them and believe half of them will need regulatory licenses.” He mentions that there are also new applicants who will join the regulatory process going forward.

Orser added, “VARA is offering a nuanced approach to virtual asset regulation that does not need to define a token or coin as a security or commodity to fall into an existing framework but covers any activity in a way that affords investor protection and have compliance in such a way that we hope other global regulators would be comfortable with by design and principle.”

According to Orser, VARA is currently looking at several hundred VASPs within their ecosystem which entails a lot of compliance and risk officers, as well as general counsels and legal advisors. He mentions given the fact that there are many micro businesses and entrepreneurs there is a great opportunity for regulation and compliance as a service offering. As he states, “Regulation and compliance as a service offering will mutualize cost and leverage expertise.” 

Orser believes the most important thing is that VARA is building a hub of global financial services with innovation and technology at the cross roads of the world including within it a strong compliance risk management and legal framework which he says “ VARA will stand out as a foundational principle and will be a thriving fixture of the community.”

As for the future, Orser states that from a regulatory standpoint once there is a steady state on licensing, supervision, and enforcement for the three existing cohorts today, VARA given it is technology agnostic and a promoter of innovation, will launch a regulatory sandbox to have a framework for product development of the future.

He states that the future will include tokenization of real world assets, including real estate, as well as micro financing, royalty rights for creators and publishers, with smart contracts for movies /music, permissioned DeFi (Decentralized Finance), gaming and the metaverse. Here he sees, “A billion users will start to challenge the boundaries of title and value” and finally interoperability, transfers identity and more.

In his final words he believes that many innovators and developers are coming to Dubai because of the growth oriented environment and open minded regulator which encourages compliant operators without sacrificing core principle of investor protection, FATF Compliance and risk. Accordingly he believes, “Blockchain technology is here to stay and its applications will infiltrate more than we can imagine same goes for gaming metaverse and all things Web3.”

Digital asset exchange Fasset receives initial approval for full market license from Dubai’s VARA

Digital asset exchange Fasset receives initial approval for full market license from Dubai’s VARA

Unilaterally, Fasset, a digital asset exchange platform with a vision to offer affordable and frictionless gateway for people in emerging markets to own and grow their wealth in digital assets has announced  that it has been granted an Initial Approval for a Full Market Product (FMP) license by the Dubai’s Virtual Assets Regulatory Authority (VARA) in UAE.

As per the announcement, “Though the initial approval does not yet allow any virtual asset activity in or from Dubai, this initial stage indicates progress in obtaining full permission to operate in Dubai. This crucial step forward allows Fasset to lead the digital assets market, as one of the first exchanges to provide regulatory protection to consumers in Dubai, as the MENA region has been identified as the world’s fastest growing cryptocurrency market.”

Raafi Hossain, CEO and Co-Founder of Fasset stated, “This is an incredibly exciting time to be leading the way in democratizing access to digital assets. As the world turns to Dubai as the financial epicenter for growth, the opportunity to work with VARA embeds improved access to digital assets with the provision of heavily anticipated regulatory guardrails. We are grateful for the leadership and guidance of VARA team in helping us achieve the milestone of being one of the first exchanges to receive Initial Approval under the FMP license, and look forward to working with the VARA team to achieve full permission to offer our services to the world from Dubai.”

Fasset has sought regulatory permissions across the biggest markets in the Middle East, Asia and Africa, where digital asset-based rails are vital.

Currently Fasset is participating as a sponsor and speaker at the Dubai Fintech Summit. Mohammad Raafi Hossain, participated in a panel discussion on Crypto and the evolving regulatory framework emphasizing the societal value of crypto.

Raafi emphasized that regulation should serve as a positive reinforcement tool for the main benefits of wealth creation and property rights ownership, rather than a reactive response to the negative aspects of the crypto industry. Secondly, he highlighted the need for an international philosophy and ethos around crypto regulation that takes into account the desires and needs of the market with regards to asset ownership and enablement.

Fasset has also signed two MOUs, one with Minted which will provide increased access to tokenized precious metals across developing markets including Turkey, Indonesia and UAE and another one with Oman Mamun which will focus on building innovative new solutions for Oman based on real world assets. The collaboration with Mamun will increase access to investment opportunities and enhance liquidity for physical assets, all within a secure and compliant framework.

UAE Helion Ventures is going to Lebanon with Beirut Digital District

UAE Helion Ventures is going to Lebanon with Beirut Digital District

UAE Helion Ventures investment, is heading to Beirut Lebanon for a round table meeting on May 11th at Beirut Digital District. Helion launched its operations in Dubai’s DIFC in September 2022 focusing on four major sectors, banking 3.0, healthcare, tokenization of real world assets, green technology, gaming, and fintech in projects across the GCC and African region.

The founders, Oliver von Wolff and Bojan al Pinto Brkic, have long-term experience in venture capital and regulated products. Oliver von Wolff, Founder and CEO, at launch stated, “Our products and services perfectly complement the ecosystem for Dubai start-ups, we are a classic equity provider and venture builder with focus on institutional investors”, to which Bojan added “we intend to capitalize on our experience, bringing the investment management know-how to new industries, such are blockchain and fintech, and even gaming and crypto.”

It is not surprising to see Helion Ventures off to Beirut, given that they are one of the most active investment venture entities when it comes to partnerships and event participation. Just before Beirut, launched Helion has partnered with Crypto 306 event taking place on May 8th 2023 at the Ritz Carlton in Dubai UAE.

Partnerships are a key pillar for Helion. For example, They have partnered with Syndicate Capital Group incubator given Helion’ interest in investing in South East Asia. Earlier, they partnered with the African Chamber of Digital Commerce, and the Hong Kong Federation of e-commerce.

Their spirit of partnerships goes even further, as they have equally partnered with other venture builders such as UAE based Masary Capital, New Tribe Capital, and Uganda based CryptoSavannah.

When it comes to startups, their most well-known investments and partnerships include cryptobank, DeFi startup Yieldster, dOTC MarsBase, DeFi OTC desk as well as African Blockchain internet startup 3air.

The 3air ecosystem is built to make it easier for previously unconnected users to join the global blockchain community. Internet subscriptions are purchased which grant the user a Connectivity NFT that can be shared, transferred and used at any 3air-compatible location. Once connected, 3air’s blockchain platform offers users access to the world of blockchain and DeFi. Users can own a digital identity, create wallets, take micro-loans and participate in revenue-generating activities.

Helion has even partnered with UAE free zones such as IFZA International Free Zone Authority

LaraontheBlock spoke to Oliver earlier to understand why Helion Ventures chose to set up in UAE and focus on MENA and Africa. He stated, “Given my previous role at Swiss Based CV Labs and then at Dubai’s Crypto Oasis, I helped build UAE’s Web3 ecosystem. So when I ventured to launch Helion I thought of Dubai because it has three essential pillars, financial capital, infrastructure, and human capital as well as its entrepreneurial spirit.”

He adds, “Helion Venture stands in the middle on one side we have friends and family investors which is not regulated and on the other we offer family offices and high network individuals the opportunity to invest with us.”

Helion invests anywhere between $50,000 – $100,000 for early pre seed stage projects, and take equity stakes for anywhere between $250,000- $500,000. They invest both in tokens and equity.

According to Oliver, Helion has a steady good quality deal flow given his long term experience and his former work at CV Labs and as such there are always great projects being presented to Helion and not spam projects.

He explains, “ We carry out strong due diligence and make selected investments, but we are also venture builders which means we actively manage our investments by supporting them with marketing, networking, business cases and so forth. We are also always open to working with other VCs because we believe if one VC has a strong project it should be shared to support these projects even more.”

While Helion’s policy is not to lead investments they do like to be anchor investors. Oliver clarified, “Anchor investors give money and support while lead investors like to take a more strategic managerial influence which I believe is not the best choice. When we invest we have already done our due diligence and trust the technology but more importantly the team.”

Oliver is bullish for2023 and believes crypto markets will go up in mid-2023. He sees the biggest markets will come from NFTs that actually have customer uses cases, like ticketing, etc.. and also sees the metaverse growing with serious projects as well as early stage token market.

Saudi Arabian Investment fund main investor in OPNX tokenized crypto exchange

Saudi Arabian Investment fund main investor in OPNX tokenized crypto exchange

Saudi Arabian Tuwaiq Investment Fund part of Jadwa Investment Fund has invested a substantial amount in OPNX tokenized crypto exchange for bankrupt crypto companies. KSA based Tuwaiq Investment Fund is a real estate opportunistic fund managed by Jadwa Investment yet as per OPNX they are also a digital asset fund.

The statement was made in an OPNX tweet as they expressed their thanks to investors who had participated in the $25 million raise. As per the tweet, “As we approach the launch of claims for our first estate, Celsius, we’d like to express gratitude to everyone who believed in our mission of helping 20M+ claimants. A special thank you goes to our major investors, including AppWorks, Susquehanna (SIG), DRW, MIAX Group, Merchant Bank International, Token Bay Capital, Nascent, Tuwaiq Limited and many more.”

The tweet goes on to state, “They contributed not just capital, but also incredible feedback throughout the process of refining our vision, product offerings, tokenomics, legal framework & decision to relocate to HK. Token Bay Capital: HK fund specializing in fast emerging web3 startups across Asia Pacific.  Nascent: Early stage venture firm who provided incredible feedback to our team and- Tuwaiq Limited: Saudi Digital Asset Fund.

OPNX exchange aims to tokenize users’ claims to bankrupted crypto companies, allowing them to use bankruptcy claims as collateral to trade perpetuals’.

OPNX will acquire all assets of CoinFLEX including people, tech, and tokens. $FLEX will be the exchange token. As per OPNX website, “ A $20 billion market of claimants is desperately looking for a solution. This list includes FTX, Voyager, Celsius, Genesis, BlockFi, Mt Gox, and our creditors.”

Prior to this OPNX exchange, was recently tagged by Dubai’s VARA (Virtual Asset Regulatory Authority) as not regulated in the UAE, and rumors had surfaced that it was Bahrain sovereign wealth fund that had invested in the company. Yet now it is obvious that it was a KSA fund.

Has OPNX tokenized exchange for bankrupt crypto companies’ raised large funds from Bahrain?

Has OPNX tokenized exchange for bankrupt crypto companies’ raised large funds from Bahrain?

OPNX exchange, which was recently tagged by Dubai’s VARA (Virtual Asset Regulatory Authority) as not regulated in the UAE, has been rumored to have investors from Bahrain, in the form of the Bahrain sovereign wealth fund given it has recently raised $25 million.

According to a  tweet by BitMEXcrypto exchange founder Arthur Hayes, “A little birdie told me that OPNX has raised big money from Bahrain Sovereign Wealth Fund. They are trading via Tai Ping Shan. Be Warned. I want my fucking money.”

Bahrain’s sovereign fund Mumtalakt website didn’t show any investment in OPNX directly but it is noted that the sovereign fund is an investor in Al Waha Fund whose portfolio consists of venture capital funds which could have invested in OPNX given that some of them have invested in crypto and blockchain entities before. 

OPNX exchange  aims to tokenize users’ claims to bankrupted crypto companies, allowing them to use bankruptcy claims as collateral to trade perpetuals’.

Kyle Davies said the fundraising deal was done, but he didn’t disclose the investors. OPNX will acquire all assets of CoinFLEX including people, tech, and tokens. $FLEX will be the exchange token. As per OPNX website, “ A $20 billion market of claimants is desperately looking for a solution. This list includes FTX, Voyager, Celsius, Genesis, BlockFi, Mt Gox, and our creditors.”

According to the website, OPNX will combine the transparency of decentralized finance with the user experience of centralized finance platforms, so that traders no longer need to compromise on performance or security— allowing them to trade claims, spot and futures all on one platform, with one universal account.

OPNX is offering spot and futures trading for major tokens such as bitcoin (BTC), ether (ETH), dogecoin (DOGE) and USD coin (USDC). Claims’ trading is expected to go live in the coming weeks, according to Lamb.

CoinFLEX’s FLEX token will serve as the native token of the OPNX platform. Holders can get up to a 50% discount on trading fees with the token, which will be periodically burned, or permanently taken out of circulation. That may potentially improve value for FLEX holders in the future if demand and traction for OPNX increases and the supply gradually decrease.

Zhu Su and Kyle Davies, the founders of bankrupt hedge fund Three Arrows Capital, last month teamed with the co-founders of troubled crypto exchange CoinFLEX to create Open Exchange, calling it the “world’s first public marketplace for crypto claims trading and derivatives,” as CoinDesk reported

Qatar Financial Authority and Blockchain entity R3 to develop Qatar’s fintech industry with DLT and digital assets

Qatar Financial Authority and Blockchain entity R3 to develop Qatar’s fintech industry with DLT and digital assets

Qatar Financial Centre Authority and Blockchain solution provider R3 have signed an MOU to develop and grow Qatar’s fintech industry using technologies such as DLT (Distributed Ledger Technology).

As per the agreement QFC and R3 will work together to create a potential lab environment that caters to commercial banks and fintech in Qatar. The partnership also aims to promote education and training on asset digitization and the use of (DLT). The two organizations will also create working groups to observe new and emerging regulatory paradigms and support the QFC’s deployment of DLT at national level.

Yousuf Mohamed Al-Jaida, Chief Executive Officer of QFC, said, “We are pleased to partner with R3, a renowned financial technology company, to explore opportunities that will contribute to the growth and success of the financial technology industry in Qatar. Through this collaboration, we aim to foster innovation and create an environment that supports the growth of fintech companies in Qatar.”

David E. Rutter, Chief Executive Officer and Co-Founder, R3, added “We are delighted to work with the QFC in helping to enhance Qatar’s rapidly growing fintech industry and promote exciting initiatives around asset digitalization and DLT. The QFC is already making great progress in expanding the development of fintech in Qatar, and this collaboration will further help create an environment conducive to innovation. We look forward to using our experience and expertise to assist the QFC in supporting the growth of Qatar-based fintech companies.”

Qatar has been moving forward with its blockchain strategy after Qatar’s National Blockchain Blueprint which was announced officially, by Qatar Communications Regulatory Authority.  In addition, two blockchain announcements have come out of Qatar demonstrating that the Gulf country is starting to utilize and grow DLT (Distributed Ledger Technologies) and Blockchain.  The first is the piloting of digital signatures and certificates to be validated on Qatar’s national blockchain network and the second is the inclusion of DLT in Qatar’s Central Bank Fintech strategy.

Additionally, even R3 is working with more governments in the GCC on blockchain enabled projects such as the recent announcement with UAE Central Bank for CBDC project.

R3 was chosen by UAE Central Bank as its technology partner to design and build a CBDC for the first phase of the central bank’s CBDC project because it is a permissioned based DLT (Distributed Ledger Technology) that decentralize assets privately and works well in regulated industries, but more importantly is its interoperability and asset fluidity. R3 will not only assist UAE’s Central Bank in developing a CBDC but also in tokenizing financial and non-financial activities, in addition to the digitalization of other financial services.

R3 to design and Build UAE’s CBDC as well as tokenize financial and non financial activities

R3 to design and Build UAE’s CBDC as well as tokenize financial and non financial activities

R3 was chosen by UAE Central Bank as its technology partner to design and build a CBDC for the first phase of the central bank’s CBDC project because it is a permissioned based DLT (Distributed Ledger Technology) that decentralize assets privately and works well in regulated industries, but more importantly is its interoperability and asset fluidity. R3 will not only assist UAE’s Central Bank in developing a CBDC but also in tokenizing financial and non-financial activities, in addition to the digitalization of other financial services. 

R3 offers interoperable CBDC solution

LaraontheBlock interviewed R3 to learn more about their role in UAE’s CBDC project.  Alisa DiCaprio, Chief Economist at R3 when asked why R3 was chosen and not another Blockchain technology provider replied, “R3’s Corda is the world’s leading permissioned distributed application platform and is specifically designed to work in highly regulated environments with today’s financial services industry. Corda powers solutions that decentralize assets while maintaining privacy and regulatory oversight, making it a favored technology for central banks looking to issue CBDCs.”

She added, “Its interoperability and asset fluidity means that central banks can move digital currencies openly and freely across network boundaries, using well-defined trusted exchange protocols that meet regulatory demands for privacy and security.” 

This is not the first CBDC project that R3 has participated in. DiCaprio explains, “ R3 has been chosen as the technology partner for numerous CBDC projects, including: Digital Tenge, where the National Bank of Kazakhstan is currently leveraging R3’s Corda for Digital Tenge CBDC project, to test the concept’s feasibility and determine the main parameters of the digital currency model. The Digital Tenge platform recently underwent successful testing with real consumers and merchants in cooperation with market participants. The DT’s entire life cycle (including the programmability and demonstration of the offline transactions chain) was tested.” 

Another project being worked on by R3 is Project Icebreaker, The Bank for International Settlements and the central banks of Israel, Norway and Sweden concluded Project Icebreaker this month, which studied the potential benefits and challenges of using retail CBDCs in international payments. 

According to DiCaprio CBDCs can strengthen financial market infrastructures in several ways. She explains, “CDBCs offer more efficient cross-border payments, faster settlement time periods and the streamlining of multi-party processes, so we’re excited to continue supporting central banks as their respective CBDC journeys.” 

As for why R3 was chosen, one of the most important reasons was the ability to facilitate interoperability and the exchange of data and assets across networks. As per DiCaprio, the platform is exploring ways to act as a bridge to various other platforms outside of the Corda ecosystem. This enables assets to move freely across networks while still maintaining privacy in the decentralization process. 

For Dicaprio interoperability is a critical development and a core focus at R3 to increase reach for users’ assets, minimizing friction with no sacrifice to safety. She adds, “By achieving this, we will be able to connect with other DLT players to provide the most seamless experience for our customers.” 

DiCaprio adds that R3 has seen a growing interest in CBDCs in the region given the region’s rising stature as a global fintech hub. This was appreciated during their partnership with UAE Central Bank. She stated to LaraontheBlock, “We look forward to seeing central banks across the world continue to explore and develop CBDCs and realizing the benefits they can bring to our financial ecosystem.”

R3 readies UAE for Tokenization

The Central Bank of UAE announced on March 23rd 2023 that it had commenced the implementation of its CBDC strategy in partnership with technology entities, UAE based G42 Cloud and Blockchain global solution provider R3. R3 then followed this with its own press release on April 4th 2023 explaining on the UAE Central Bank CBDC project including as well Clifford Chance who will be providing critical legal oversight for the strategy.

R3 in their press release stated that R3’s technological support will enable the Central Bank of UAE to ensure the readiness of the UAE for the potential future tokenization of financial and non-financial activities, in addition to the digitalization of other financial services.

Digitization in UAE

Parties that will be working with the UAE Central Bank CBDC project all agree that the project is part of a wider strategy for digitization in the UAE.

David E. Rutter, CEO at R3, commented, “This is another landmark moment in bringing CBDCs even closer to production and issuance. CBDCs can strengthen our financial market infrastructure in several ways, including more efficient cross-border payments, faster settlement time periods and the streamlining of multi-party processes. The CBUAE has made a significant step forward in realizing these benefits. We are honored and excited that R3 has been selected to design and build CBUAE’s CBDC ecosystem in this innovative move towards building a more open, trusted, and enduring digital economy. We look forward to supporting the CBUAE in the next stage of its CBDC journey.” 

While Talal Al Kaissi, CEO at G42 Cloud, stated, “We’re thrilled to be supporting the CBUAE in the development of its digital dirham. This collaboration represents an important milestone in the digitalization of the UAE’s monetary and payments framework and ensuring that the country remains at the forefront of financial services innovation. As a company founded in the UAE, we have seen first-hand the country’s rapidly advancing status as a global fintech hub and are excited to be working with the CBUAE in leading its digital transformation. We look forward to working with the Central Bank and R3 to deliver a cutting-edge CBDC infrastructure that meets the highest standards of efficiency, security, and innovation.”

While Jack Hardman, Partner at Clifford Chance and Head of Fintech in the Middle East added, “As CBDC development moves from research to real-life building, it is vital that central banks are aware of the legal implications of any chosen design feature or strategy, in addition to how this emerging technology interacts with existing regulations. Clifford Chance has an established track record as a leading advisor in the fields of financial services and technology, and we look forward to working with the CBUAE on its CBDC implementation strategy.”

As per UAE Central Bank, the first phase of the CBDC strategy will be completed within the next 15 months. It will include a soft launch of MBridge to facilitate real value cross border CBDC transactions for international trade settlement, proof-of- concept work for bilateral CBDC bridges with India, one of the UAE’s top trading partners and finally, proof-of-concept work for domestic CBDC issuance covering wholesale and retail usage.

The UAE Central Bank views the UAE CBDC as able to address the pain points of domestic and cross-border payments enhance financial inclusion and the move towards a cashless society. It will further strengthen the UAE’s payment infrastructure, providing additional robust payment channels, ensuring a resilient and reliable financial system. More importantly, the CBUAE aims to ensure the readiness of the UAE to integrate the payment infrastructures with the future potential tokenization world, the tokenization of the financial and non-financial activities. 

H.E. Khaled Mohamed Balama, the Governor of the CBUAE, stated at the time, “CBDC is one of the initiatives as part of the CBUAE’s FIT program, which will further position and solidify the UAE as a leading global financial hub. The launch of our CBDC strategy marks a key step in the evolution of money and payments in the country. CBDC will accelerate our digitalization journey and promote financial inclusion. We look forward to exploring the opportunities that CBDC will bring to the wider economy and society.” 

The Central Bank of UAE stated that it was now ready to enter into the next major milestone of its CBDC journey after several successful CBDC initiatives including project Aber with Saudi Central Bank in 2020, and the accomplishment of the first real-value cross-border CBDC pilot under the “mBridge” Project with the Hong Kong Monetary Authority, the Bank of Thailand, the Digital Currency Institute of the People’s Bank of China and the Bank for International Settlements in 2022.