UAE RAK Bank and Bitpanda to offer digital asset services

UAE RAK Bank and Bitpanda to offer digital asset services

The National Bank of Ras Al Khaimah (“RAKBANK”), a UAE bank partners with Bitpanda Technology Solutions, a leading digital assets infrastructure provider, to provide a robust platform that will enable UAE residents to effortlessly manage digital assets, subject to UAE Central Bank approval.

As per the announcements, RAKBANK customers will be able to pursue various digital assets use cases unlocking one of the most complete offerings available in the UAE market. This allows banks to participate in the virtual asset economy without needing to develop their own in-house virtual asset capabilities.

Dongjun “DJ” Choi, Group Chief Customer Officer of RAKBANK commented: “We believe digital assets represent one of the future ways for customers to manage their finances more efficiently and securely. This partnership is poised to fill the gap in the market for a trustworthy and regulated banking platform to deal in digital assets. By merging our expertise, we aim to revolutionize the traditional financial landscape for the benefit of our customers, enabling them to explore a broader range of digital assets opportunities.”

Lukas Enzersdorfer-Konrad, CEO of Bitpanda Technology Solutions added: “RAKBANK has a long history of pioneering crypto innovation in the UAE, and we want to support their ambitions. Bitpanda Technology Solutions is fully modular, enabling us to tailor products to our partners’ needs. This partnership exemplifies the importance of that flexibility. Together, we will transform crypto access for millions in the UAE and lay the groundwork for future innovation.”

Bitpanda Technology Solutions stands as one of the most scalable digital assets infrastructure providers globally. As a highly regulated leader in the industry, it boasts a worldwide footprint and is already trusted by some of the world’s foremost financial institutions, banks, neobanks, and fintechs.

In May 2024, Bitpanda, Austria’s first unicorn company, announced plans to expand to the Middle East, with the launch of Bitpanda MENA with offices in DMCC Crypto Center. Bitpanda will match the region’s ambitions and provide the infrastructure necessary to power future trading growth and unlock digital assets for millions of investors.

At the time Bitpanda noted that Banks, fintech, (neo-)brokers and crypto-native companies in the region will be able to partner with Bitpanda Technology Solutions (BTS) to launch their own trading solutions powered by Bitpanda’s infrastructure in as little as 3 months once Bitpanda MENA has finalized obtaining its local license later this year.

BitPanda already partners with several of Europe’s largest banks, and currently provides the trading infrastructure for over 20 million customers across Europe.

UAE based 5irechain launches environmentally friendly mainnet

UAE based 5irechain launches environmentally friendly mainnet

UAE based 5irechain, a blockchain platform with a strong focus on sustainability, has announced the public launch of its mainnet following a highly successful testnet phase of 1 million on chain transactions within its first month.

As per the press release, With the mainnet now live, 5ire aims to revolutionize the blockchain industry by showcasing how blockchain technology can be both efficient and environmentally friendly.

The 5ire mainnet is capable of processing up to 1,500 transactions per second, and uniquely, it returns 50% of gas fees to users. This initiative strives to foster a greener future for the web3 space.

5ire’s mainnet is designed to be developer-friendly and employs a Sustainable Proof-of-Stake (SPoS) mechanism. This mechanism rewards users who adopt environmentally conscious practices, thereby emphasizing an ecological-first approach. The platform underscores the potential for a fast, secure, and cost-effective network while maintaining environmental accountability.

Pratik Gauri, CEO and co-founder of 5irechain, emphasized that the mission is to demonstrate blockchain technology as a powerful force for good. By integrating sustainability metrics directly into their protocol, 5ire aims to create a blockchain that is not only fast and efficient but also aligned with global sustainability goals.

5ire’s mainnet features a dual-chain architecture that is fully EVM-compatible, allowing developers to build decentralized applications (dApps) that drive positive impact within the web3 realm. The platform includes features such as a single key that derives both a Substrate-native and an EVM account, ensuring that Ethereum developers can build on the platform with ease.

Gauri highlighted that the company’s primary goal is to build a long-term, sustainable product with a proven track record, rather than chasing the image of a unicorn. The launch of the mainnet, particularly on India’s Independence Day, marks a significant milestone for the company and its team members, many of whom are from India.

Prateek Dwivedi, co-founder and CPO at 5ire, expressed excitement about the innovations that the growing community of developers will bring to life on their network. He highlighted that 5ire is not just another blockchain platform, but a movement towards a more sustainable and equitable future.

UAE Dubai Court of First Instance recognizes crypto as a form of salary payment

UAE Dubai Court of First Instance recognizes crypto as a form of salary payment

In a recent article in Lexology, the UAE Dubai Court of First Instance has ruled in 2024 recognizing the payment of salaries in cryptocurrency under employment contracts. The decision was made in reference to case number 1739 of 2024.

According to Mahmoud Abuwasel from law firm Wasel & Wasel, “This decision, rendered in case number 1739 of 2024 (Labour), represents a notable departure from a previous judgment by the same court in 2023, where a similar claim involving cryptocurrency was denied due to the employee’s failure to provide a precise valuation of the digital currency.”

The case

The case was about unpaid wages and wrongful termination compensation where part of the payments was in EcoWatt tokens. The dispute centred on the defendant’s failure to pay the EcoWatt token portion of the salary for six months and the allegedly wrongful termination of the plaintiff’s employment.

The court recognized and enforced that crypto was a valid form of remuneration, despite the traditional payment norms that typically involve fiat currencies.

The court ruled in favour of the employee, not only recognizing the validity of payment in cryptocurrency but also ordering the payment to be made in EcoWatt tokens rather than converting it into fiat currency.

The court’s decision in 2024 was based on the principle that wages are a right of the employee for the work agreed upon. The court noted that as per Article 912 of the Civil Transactions Law, wages are a right of the worker against the employer in return for the agreed work and the provisions of Article 22 of Federal Decree-Law No. (33) of 2021 on the Regulation of Labour Relations and Article 16 of the Cabinet Resolution No. 1 of 2022 concerning the Executive Regulations of this Decree-Law provide that the employer is obligated to determine the amount and type of wage in the employment contract, and if not, the court shall determine it.

As such the court found that the employer must pay the wages to the workers on the due dates, either through the Wage Protection System (WPS) or any other approved systems, and it is the employer who is tasked with proving the payment of wages to the workers and providing evidence of that. As the respondent did not provide evidence of payment of the claimant’s salary for the claimed period, and since the documents were void of such evidence, the court orders the respondent to pay the claimant [redacted] AED in addition to [redacted] EcoWatt tokens.

Acccording to AbuWasel, “ This ruling marks a significant shift in the court’s approach, demonstrating a greater acceptance of cryptocurrency as a valid and enforceable means of remuneration. It underscores the importance of upholding contractual agreements as long as they are clear, agreed upon by both parties, and not in conflict with public policy or law.”

Abuwasel adds, “ The Dubai Court’s 2024 ruling is a testament to the UAE’s progressive legal environment, particularly regarding the use of digital currencies in employment contracts. The court’s willingness to enforce cryptocurrency payments as stipulated in contracts sets a positive precedent that will likely encourage further integration of digital currencies in various sectors, not just in employment.”

UAE XRP oil sale deal is false and illegal in UAE

UAE XRP oil sale deal is false and illegal in UAE

The recent story that the UAE and India carried out an oil deal using XRP token over CFT (Crypto trading Fund) ledger, is not only unbacked and false but also illegal in the UAE.

The story which was first published in a media entity called Cryptoalert soon was copied and published as if it was real news.

The cryptoalert piece stated that “In a historic shift, India and the United Arab Emirates (UAE) have completed their first-ever crude oil transaction using their local currencies, effectively bypassing the US dollar. This landmark trade signals a broader strategy, set in motion last July, aimed at promoting trade in native currencies and cutting down on dollar-conversion costs.”

It also stated that the trade was integrated with the XRP Ledger System CryptoTradingFund (CTF), allowing customers to earn cash back rewards in CTF tokens.

The piece did not mention which entities had transacted this crude oil transaction, nor where there any social media posts, press releases or confirmations from either CTF or Ripple on the topic. Yet this did not stop many media entities in the crypto and blockchain ecosystem from publishing the story.

Since then prominent blockchain pundits have noted how media publish false stories to push crypto users to purchase XRP and CFT token.

Ripple is not XRP

“XRP” and “Ripple” are often erroneously used interchangeably. Ripple (previously Ripple Labs) is a company, and XRP is the name of the native cryptocurrency for XRP Ledger, an open-source distributed ledger run by the XRPL foundation.

As such proponents of XRP are distributed across many entities and individuals and not only Ripple which uses XRP ledger in some of its products.

UAE Dirham backed stablecoin

In addition, the UAE Central Bank recently announced its payment token regulation which stipulates that stablecoins, and crypto cannot be considered as legal tender in the UAE. The only stablecoin that the UAE will allow for payments inside the UAE are digital dirham stablecoins.

To date no digital dirham stablecoin has been issued within the UAE. As such it would be not only impossible but also illegal for oil to be sold to another country using a digital asset, crypto other than the dirham stablecoin which is pegged to the UAE Dirham.

XRP recognized in DIFC

The only recognition for XRP in the UAE is within DIFC ( Dubai International Financial Center). In November 2023, two new crypto tokens TonCoin (TON), and XRP joined Bitcoin (BTC), Ethereum, and Litecoin as recognized crypto tokens by the Dubai Financial Services Authority (DFSA), the financial regulatory agency of the special economic zone, the Dubai International Financial Centre (DIFC). The announcement of XRP being accepted into DIFC as a crypto token was published in a Ripple press release.

The DFSA the crypto token regime now includes five crypto tokens that can be utilized by virtual asset firms within the DIFC. Licensed firms will be able to incorporate XRP and TON into their virtual asset services. XRP and TON will be available for use by institutions located in the DIFC to accelerate faster, more efficient global value exchange.

As such the only legal utility for XRP would be in a free zone DIFC to be specific.

UAE regulated crypto custodian Komainu chosen by Nasdaq

UAE regulated crypto custodian Komainu chosen by Nasdaq

UAE regulated Komainu, diigtal asset custodian is now a Core Custodian for Nasdaq’s suite of Crypto Indices. Nasdaq’s Core Custodian requirements are designed to ensure the security and integrity of digital assets.

Key criteria include, bankruptcy remoteness which entails legal protection and segregation of client assets in the event of custodian insolvency,   regulatory compliance which entails licensing by reputable regulatory bodies. Komainu is regulated by Dubai’s Virtual Asset regulatory Authority. Also included in the criteria that allowed Komainu to be chosen is the advanced security practices for private key generation and segregated storage, cold storage, risk management that offers a comprehensive frameworks for operational and custody risk mitigation.

In addition criteria also include asset recovery, auditing, and insurance protection.

“We are pleased to be selected as a Core Custodian by Nasdaq, a testament to our commitment to institutional-grade security and operational excellence. This partnership validates our approach to digital asset custody and aligns perfectly with our mission to become the preferred gateway to digital assets for institutional investors. At Komainu, we’ve built our foundation on the very principles Nasdaq demands, ensuring that institutional investors can engage with digital assets confidently and securely.”

Komainu, was the first VASP in UAE to be granted a full virtual assets service provider license by Dubai’s virtual asset regulatory authority in UAE. The license was issued on August 18th 2023.

The announcement comes as the first Ethereum spot exchange-traded product (ETP) goes live on Nasdaq. The product is called the iShares Ethereum Trust ETF. It can be identified by its ticker symbol ETHA. Nasdaq and BlackRock collaborated extensively, crossing both regulatory and operational hurdles, to successfully launch ETHA.

Tether invests $3 million in Kuwait’s Kem fintech startup

Tether invests $3 million in Kuwait’s Kem fintech startup

Tether Operations Limited, a company in the digital assets domain, and creator of USDT stablecoin has announced a $3 million strategic investment in Kuwait based Kem app, a platform designed for money transfers and financial management.

As per the press release, the investment and collaboration will allow Kem App to introduce USDT on its platform to drive widespread adoption in the MENA region to revolutionize traditional payment systems.

The Middle East and North Africa (MENA) has the sixth largest crypto economy of any region, with an estimated $389.8 billion in on-chain value received between July 2022 and June 2023. This represents nearly 7.2% of global transaction volume during this period.

The announcement notes that with the launch of USDT on Kem app, millions of expats in countries such as Kuwait, Bahrain, Saudi Arabia, Qatar and Iraq will benefit from using USDT and accessible financial services.

The Kem app, enbles seamless cross-border transactions. Tether’s investment underscores its commitment to expanding accessibility and fostering global financial inclusion. This initiative also signifies a strategic expansion into the Middle East market, with Kem serving as a regional asset.

Paolo Ardoino, CEO of Tether, said, “This investment reinforces Tether’s commitment to promoting financial inclusion and stability. We believe that everyone should have the means to protect their families and businesses against inflation while enjoying unrestricted access to financial services. Our investment in Kem App is a testament to this belief, as the platform provides tools that simplify access to the financial system, perfectly aligning with our mission to advance financial freedom for all.”

Stablecoin Growth in MENA

In June 2024, the UAE Central Bank approved the issuance of a regulation for licensing and overseeing stablecoins and a series of policies aimed at supporting the banking, insurance, and financial services sectors. UAE Stablecoin Payment Token services regulation came out laying down the rules and conditions by the Central Bank of UAE for licenses pertaining to payment tokens, not allowing algorithmic tokens to be included and only allowing foreign stablecoins to be used to purchase virtual assets.

The UAE Central Bank made a clear distinction between the Dirham Payment token which can be issued by licensed payment token issuers used for any lawful purpose, and the foreign payment token issued by a Registered Foreign Payment Token Issuer which can only be used as a means of payment for purchasing virtual assets or derivatives of virtual assets.  

As reported by CoinMarketCap, the total market capitalization of stablecoins reached $174 billion as of August 2024 – with USDT (Tether), USDC (Circle), and DAI, together accounting for circa 93 percent of the market.

Tether is not the only stablecoin issuer that is trying to enhance its presence in the MENA region. In December 2023, Circle Internet Financial (Circle), and UAE based Fuze, MENA’s digital assets infrastructure provider, to expand adoption of USDC stablecoin in MENA region, after signing MOU (Memorandum of Understanding).

Circle, the issuer of the US-dollar backed stablecoin USDC, will work with Fuze to expand the adoption of USDC amongst new customers in the region, such as banks, fintechs, traditional enterprises and Web3 firms. The scope of the agreement covers the Middle East, Africa and Turkey, paving the way for the expanded use of USDC in these regions and the piloting of new use cases relevant to these markets.

Tether’s investment and collaboration is also setting the stage for Kem to enhance its offerings and better serve millions of underserved businesses throughout the Middle East. By incorporating cryptocurrencies into its platform, Kem aims to replicate the success of financial platforms offering cryptocurrencies in other markets, driving mass adoption and fostering a more inclusive banking landscape in the Gulf region.

England Institute of Chartered accountants and UAE Banks join forces for digital assets

England Institute of Chartered accountants and UAE Banks join forces for digital assets

The Institute of Chartered Accountants in England and Wales (ICAEW) joins forces with the UAE Banks Federation (UBF), to help companies navigate the changing digital assets landscape. This initiative coincides with the UAE’s advanced pilot of a Central Bank Digital Currency (CBDC), which is designed to work alongside traditional physical currencies, offering a secure and efficient method of digital transactions. .

Hanadi Khalife, head of Middle East at ICAEW, commented, “The UAE is setting a global standard with its proactive adoption of CBDCs. Our partnership with the UAE Banks Federation is testament to our commitment to guiding this transformation. Accountants play a crucial role in ensuring organizational compliance and success in this new digital era.”

The announcement was made during a virtual event. Panels of experts explored the UAE digital currency landscape highlighting the potential of CBDCs in transforming bank operations.

One panelist, Jamal Saleh, director general of UAE Banks Federation, shared his view, “The UAE’s progressive approach to CBDCs and AI places it at the forefront of financial innovation. Embracing digital assets presents vast opportunities, but it also requires robust cybersecurity measures and interdepartmental collaboration. Through joint efforts, such as our work with ICAEW, and constant upskilling, companies can achieve secure and compliant integration of digital assets.”

However, they also highlighted the associated challenges with this digital shift. As digitization and AI adoption increase, so will the risk of cybercrime, necessitating robust security measures. With bad actors constantly innovating new ways to exploit vulnerabilities and steal sensitive financial data, the panel urged organizations to continuously improve their cybersecurity measures to protect against these growing threats.
Panelists also focused on the absence of a standardized accounting framework for digital assets, which can lead to inconsistencies in reporting, impacting investor confidence and potentially complicating regulatory compliance. Panelists encouraged organizations to proactively develop robust accounting practices and called for industry-wide collaboration to establish clear, consistent frameworks.

They emphasized the importance of seamless cooperation between IT, audit, and finance functions within organizations to effectively manage digital assets and ensure secure, compliant integration, as well as the need to strengthen capabilities and expertise among teams.

Discussions also highlighted the UAE’s significant global position, accounting for five to 10 per cent of global digital asset trading volume.

UAE QCP capital: investors sideline ETH and Bitcoin makes incredible recovery

UAE QCP capital: investors sideline ETH and Bitcoin makes incredible recovery

UAEbased QCP Capital recently analyzed the price of Bitcoin stating that it has witnessed an unbelievable and swift recovery, comparing it with the increasing sideline of ETH ( Ethereum).

QCP, an institutional digital assets company received In-Principle Approval from the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) to conduct regulated activities in May 2024. According to QCP, the decision to make a move into this strategic market for the company’s footprint was in anticipation that the Middle East is going to become a dominant global hub for capital flowing into traditional and digital assets.

According to their market insights report published on August 10th , BTC ( Bitcoin) price is almost exactly where we started a week ago, hovering above 60k. It noted, “Truly an unbelievable and swift recovery, after getting hammered to 49k lows on Monday which was the worst single-day drawdown we’ve seen in years.”

The added that there were two major observations, the first is that there has been a fundamental shift in the liquidity profile of ETH relative to BTC. As per their analysis, while BTC is becoming increasingly integrated into the mainstream macro capital markets, ETH is becoming increasingly sidelined. This development likely stems from the distinct lack of interest in the ETH spot ETFs relative to the BTC spot ETF.

They believe that BTC as digital gold is a compelling narrative to investors while ETH is lacking one. This liquidity shift was made painfully obvious on Monday when ETH plummeted 22% compared to BTC’s 16%.

Yet they state that this is not necessarily negative for ETH price, because while Bitcoin has a propensity for exponential price gains, it also has a potential for larger drawdowns. They note in the report, “Before the ETH spot ETF, the difference in implied volatility between BTC and ETH was closer to 5%. Right now, it has expanded towards 20% and could be even higher. Perhaps the strategy here is to sell BTC volatility and buy ETH volatility.”

In terms of the second observation, they believe the Bitcoin is bullish. They attribute this analysis to the fact that despite what they call the crazy volatility, there was consistent demand for BTC calls expiring in 2025 with strikes close to 100K.

According to their analysis, the crypto market, is back on track towards a bullish year end.

Ripple and DIFC to accelerate blockchain in UAE

Ripple and DIFC to accelerate blockchain in UAE

Ripple, a provider of enterprise blockchain and crypto solutions, has partnered with the DIFC Innovation Hub to accelerate blockchain and digital assets innovation in the UAE.

As per the press release, the new partnership will connect the next generation of developers with the DIFC Hub, the largest innovation community in the region and home to more than 1,000 growth-stage tech firms, innovation companies, digital labs, venture capital firms, regulators and educational entities. The partnership between Ripple and the DIFC Innovation Hub will provide the means to drive blockchain and crypto adoption amongst early-stage companies and scale-ups as well as to introduce and position the technology with traditional large strategic institutions and their use cases.

“The UAE is one of the most advanced jurisdictions globally when it comes to offering regulatory clarity for licensed firms to offer virtual asset services and fostering an environment in which the next generation of financial innovation can flourish,” said Brad Garlinghouse, Ripple Chief Executive Officer. “Our partnership with the DIFC Innovation Hub promises to drive the adoption of blockchain technology in the region as the XRPL continues to be a leading blockchain for the region’s start-ups and scaleups building real use cases.”

Ripple has committed one billion XRP to accelerate development and new global use cases on the XRP Ledger (XRPL), the decentralised, layer 1 blockchain. Through the commitment, Ripple will provide financial, technical, and business support to developers. Since announcing the 1B XRP Fund in late 2021, Ripple has funded over 160 teams building on the XRPL, reaching 47 countries to date, across a wide range of use cases spanning decentralised finance (DeFi), to Real World Assets (RWA), and other groundbreaking new solutions.

Arif Amiri, DIFC Chief Executive Officer, added, “Today marks a significant milestone in Dubai’s ongoing journey to accelerate its position as a leading international centre of excellence for business and finance. Our partnership with Ripple underscores the strength of our developer community and DIFC’s commitment to fostering technological advancements. The collaboration further cements DIFC’s role as a leading global hub for talent, tech and innovation, as we continue to enhance our ecosystem, powered by a world-class regulatory jurisdiction, to drive the future of finance.”

“The UAE’s progressive approach to fintech, coupled with Ripple’s billion XRP developer fund, creates a fertile ground for innovation in the UAE,” said Reece Merrick, Ripple Managing Director, Middle East and Africa. “Our new collaboration with the DIFC will empower regional talent to build the next generation of financial solutions on the XRP Ledger, solidifying the UAE’s position as a leading fintech hub globally.”

XRP as a digital asset was recently accepted as a recognized crypto in DIFC.

Digital Bank Ibanera joins UAE’s RAK digital assets oasis

Digital Bank Ibanera joins UAE’s RAK digital assets oasis

Ibanera, digital banking entity, has joined RAK Digital Assets Oasis (RAK DAO), a UAE Free Zone dedicated to digital assets. Ibanera wants to tap into the Web3 and fintech landscape in the Middle East.

According to the press release, by aligning with RAK DAO, Ibanera gains access to an array of resources designed to propel growth and innovation. This includes a robust ecosystem of Web3 companies, funding avenues, and cutting-edge blockchain technology.

Dr. Sameer Al Ansari, CEO of RAK DAO, expressed enthusiasm about the partnership, “Our mission is to be the future-centric free zone for tomorrow’s leading companies. Ibanera’s presence aligns seamlessly with our vision of fostering groundbreaking innovation and next-gen banking solutions. This partnership not only elevates Ibanera’s role in this vibrant market but also enriches our ecosystem with advanced financial services.”

The partnership will enable Ibanera to integrate its advanced financial solutions, including its PORTL API and other services, within RAK DAO’s network. This integration aims to enhance the accessibility and functionality of Web3 solutions and digital asset management for businesses ranging from startups to large enterprises.

Michael Carbonara, CEO of Ibanera, emphasized the strategic fit of the collaboration, “Joining RAK DAO’s ecosystem is a thrilling opportunity for us. Ras Al Khaimah’s progressive regulatory environment and business-friendly policies provide an ideal foundation for our growth. We look forward to contributing to and benefiting from the innovative community RAK DAO supports.”

Ibanera’s platform, known for its secure and innovative financial services, will now offer RAK DAO’s Web3 businesses a seamless experience, from NFT tokenization to advanced digital banking. This partnership is set to drive significant advancements in the fintech and digital asset spaces, reflecting both companies’ commitment to innovation and excellence.