Blockchain, and AI startups gravitate to DIFC AI Web3 hub

Blockchain, and AI startups gravitate to DIFC AI Web3 hub

Slowly but surely, the DIFC (Dubai International Financial Center) innovation hub has been welcoming Web3, Blockchain, AI entities and investor companies into their ecosystem. The DIFC Innovation Hub aims to have 500 entities by 2028.

So far they have welcomed in a dozen or more startups and investor partners. Most recently AI and Blockchain Company Mentat Technologies joined the AI &Web3 Campus. In November Mentat announced that it will develop an open source SAP connector and Enablement API to the Algorand blockchain.

Another company that has recently joined is Kodin Soft, which develops high tech software solution. The company is working on several projects including TELESCOPELIVE which empowers astrophotography and remote imaging allowing space enthusiasts to experience the night sky like never before.

Even Avail, a Blockchain project spun off of Polygon in 2023 aiming to handle data storage and verification for blockchains, which launched the data attestation bridge test net to secure data off-chain has joined. The bridge connected to Ethereum, and can be used by both zero-knowledge and optimistic rollups that use Ethereum as a base layer.

Avail aims to be a solution for layer 2s and 3s to publish data off-chain, to reduce the high transaction fees that often come from posting data on the main Ethereum blockchain.

Other companies joining include HoloFair, a metaverse platform. HoloFair facilitates seamless integration of gamification, e-commerce, and interactive elements, ensuring an immersive and data-rich metaverse experience.

Even AI startup Zarqa, incubated by SingularityNET, and specializing in Neural Symbolic Large Language Models (#LLMs) has come on board.. Leveraging engineering expertise, Zarqa pioneers the next generation of LLMs with scaled neural-symbolic AI, reflecting technical innovation and steadfast leadership.

CyberNet AI also joined the Dubai AI & Web3 Campus. Cybernet pioneers virtual voice robot services through a seamless SaaS model, featuring AIDOS, an Artificial Intelligence Dialog Operating System. Offering versatile applications in debt collection, NPS surveys, and telemarketing, Cybernet’s solution boasts an impressive 82% collection efficiency while reducing operational costs by 1.5 times.

Then there are the incubators and investors that have joined the AI Web3 campus at DIFC Innovation Hub. Metafour Labs has come in dedicated to elevating early-stage tech ventures specializing in blockchain, and Web3. The company provides strategic advisory services for successful launches and scaling.

Ibtikar a business consultancy firm for Web3 joined. While DIFC Innovation Hub and AI Web3 campus partnered with Middle East Venture Partners (MEVP), MENA venture capital firm dedicated to supporting innovative tech companies in the Middle East.

In addition to those mentioned above many other entities have joined the Web3 AI Campus as DIFC issues commercial licenses at 90% subsidies.  DIFC aims towards having a vibrant ecosystem of DLT, AI, and Web3 entities.

According to DIFC, “The initiative aims to propel Dubai’s journey towards becoming a digital society, fostering collaboration, innovation, and global talent attraction.”

The AI and Web 3.0 Campus aspires to become the MENA region’s largest hub for AI and Web3 companies. With a goal of hosting over 500 high-tech companies by 2028, it envisions bringing in $300 million in funds and creating over 3,000 jobs within five years.

Mohammad Alblooshi, CEO of the DIFC Innovation Hub , states that these licenses will elevate Dubai’s position as a preferred destination for tech-focused companies, driving world-class talent and diversified investments to the region.

Maybe this is why South Korean game developer, Wemade, and UAE DIFC Innovation Hub partnered to build WEMIX Play web3 gaming community to support Dubai Program for Gaming 2033.

C1 Fund and Spartan group to drive innovation in digital assets secondaries

C1 Fund and Spartan group to drive innovation in digital assets secondaries

Cayman Island C1 Fund, a fund dedicated to the digital assets place, with a presence in the UAE and USA, has partnered with Asian based Spartan Group, a Web3 advisory and asset management firm.

As per the press release, the partnership with Spartan Group signifies a key milestone for C1 Fund, as Spartan Group brings unparalleled expertise and a proven history of success in advising on multi-billion-dollar M&A transactions and fundraises within the digital assets sector.

We are thrilled to join forces with Spartan Group, said Dr. Najam Kidwai, CEO & Co-Founder of C1 Fund. “Spartan deep understanding of the crypto, Web3 and blockchain landscape, coupled with a track record of successful engagements with industry leaders, aligns seamlessly with our vision for C1 Fund. The synergy between C1 Fund and Spartan Group is a testament to our shared commitment to driving innovation and growth in the digital assets sector. This collaboration significantly enhances our ability to identify and seize emerging opportunities, expanding our influence within the dynamic realm of digital assets secondaries.”

Spartan Group’s Co-Founder, Casper B. Johansen, expressed equal enthusiasm, stating, “Collaborating with C1 Fund opens up exciting avenues for both organizations. C1 Fund’s focus on digital assets secondaries complements our expertise, creating a synergy that will enhance our ability to drive value for our clients and the broader crypto community. We look forward to a mutually beneficial partnership that pioneers innovation and growth.”

Abu Dhabi based Blockchain Foundation merges with Klaytn to form new Blockchain

Abu Dhabi based Blockchain Foundation merges with Klaytn to form new Blockchain

Finschia, an Abu Dhabi based Blockchain Foundation has announced the merger with Klaytn Foundation, to form a new blockchain mainnet.

The two foundations have submitted their proposals to their respective governance members for open discussion, with voting scheduled from 26 January till 2 February. The governance proposal submitted by Klaytn Foundation can be viewed on the Klaytn Governance Forum.

The chain merge is designed to create a highly competitive mainnet ecosystem by integrating the capabilities of Klaytn and Finschia. The two foundations will form an integrated organization, sharing technologies, services, and business networks, working alongside Kakao, LINE, and other partners who have contributed to the development and ecosystem expansion of their respective mainnets.

As per Finschia blog,” By doing so, we plan to establish ourselves as Asia’s largest Web3 ecosystem, taking the lead to drive blockchain mass adoption in the region.”

Klaytn’s robust technical infrastructure and strong presence in South Korea, Singapore, and Vietnam, will be combined with Finschia’s comprehensive service network that is popular in Japan, Taiwan, Thailand, and Abu Dhabi.

Post-merge, Klaytn’s DeFi and gaming services and Finschia’s NFT, payment, and AI services will come together to create a massive ecosystem of 420+ DApps and services, 45+ governance partners, and 450+ Web3 resources, the largest Web3 network in Asia. The merged blockchain will also inherit integration with both Kakao and LINE messengers, creating a powerful ecosystem with over 250 million potential Asian user touchpoints.

Post-merge, the unified foundation will continue to pursue ecosystem expansion in the RWA tokenization, GameFi and DeFi verticals through collaborations with Japanese, South Korean, and Southeast Asian partners, while continuing to develop messenger-based Web3 services and the digital commerce platform. With access to every Kakaotalk and LINE user, the new public blockchain will also act as a springboard for Asia’s IT and entertainment enterprises.

“We are excited to be taking the first step toward unlocking the enormous synergy of merging the public blockchains started by Kakao and LINE, which are both leading IT companies in Asia,” said Klaytn Foundation and Finschia Foundation. “We will give our best to make this merge an opportunity to innovate and lead the Asian blockchain industry in both technology and adoption.”

UAE to launch a $250 million blockchain seafood project

UAE to launch a $250 million blockchain seafood project

BoCG ventures and UAE Exim Finance collaborate on a $250 million investment on transparent and sustainable seafood ecosystem blockchain enabled seafood project in Abu Dhabi UAE.

The Aquaculture project includes the development of innovative infrastructure, such as a 10,000 metric ton salmon recirculation aquaculture system (RAS) farm, and an end-to-end seafood trading platform.

The project will utilize blockchain technology to bridge the gap between seafood products with supply chain and trade financing efficiencies. This initiative tackles difficult constraints in seafood production, trading and supply chain and proposes to scale the value proposition for buyers, sellers, seafood producers and supply chain players in a win-win scenario that grows the market through transparency and competition.

BoCG Ventures, has launched its newest project: a hybrid 10,000 MT RAS Farm located in Abu Dhabi, UAE. In addition to the land-based farm, the project features a blockchain enabled trading platform designed to simplify, fasten, and de-risk global seafood transactions.

“We believe that food security is a critical element of national security, and relying on imports for 70% of the region’s food poses a substantial risk. A land-based RAS farm is an innovative solution for serving the region in a carbon-effective way because it tackles regional challenges in trading efficiency, transparency and transaction financing. This initiative aligns with our firm’s commitment to efficiently and sustainably address the region’s food needs.” – Lyon Kassab, BoCG Ventures Managing General Partner

“The partnership between EXIM Finance and BoCG Ventures is built on compatibility. BoCG Ventures relies on our track record for creative solutions and strategic export/import relationships, while we trust them to excel in project development, operations, technology adoption, and financial returns. This collaboration aims for a long-term partnership based on shared expertise, aspirations, and forward-thinking leadership, ensuring project success through our combined operational models.” – Anshul Dawani, EXIM Managing Partner

The potential harbored by the venture has captivated sustainability-focused investors, leading to a $250 Million USD investment spearheaded by EXIM Finance through a combination of debt and equity financing. This capital infusion is anticipated to accelerate the growth trajectory of the joint venture, fostering a symbiotic ecosystem that ushers buyers and sellers into a new era of seafood markets in the digital epoch.

“BoCG Ventures’ Aquaculture Project is in direct relation to our mandate as an investment firm – as it intertwines and balances environmental and social impact investing, business scalability, and sustainability. We believe that over the next decade the venture’s trading and manufacturing ecosystem will become a mainstay across the world’s most competitive seafood markets. We support the vision behind the joint venture and bring depth to our global portfolio of infrastructure-led projects that place sustainability at the heart of our ethos.” – Salah Ibrahim Al Nasser, EXIM Chairman

“With the advent of the joint venture, more markets that need access to sustainable food sources can leverage our products, technology, partnership, and model. On the demand side, we will be able to provide more access to high-quality seafood to the region and compete on more than simply price. On the supply chain side, we can bring more efficiency between markets that need it most.” – Salim Makvana, Aquaculture Farm Lead

Commenting on the joint venture and fundraise, Board Director Saeed Al Darmaki adds, “As a former ADIA lead and early adopter of blockchain, I must say that BoCG Ventures addresses a crucial gap in the region and globally. Bringing the utility of blockchain in trading and financing platforms aims to bridge traditional business and finance needs using modern techniques while aligning with the GCC’s imperative for food security and a net-zero vision.”

MintLayer to tokenize realestate assets in UAE

MintLayer to tokenize realestate assets in UAE

UAE based MintLayer, a layer 2 blockchain that utilizes Dynamic Slot Allocation (DSA) consensus merging Proof-Of-Stake and Bitcoin technologies to make decentralized financial markets attack-proof,  will be launching its mainnet on January 29th 2024 and is planning tokenize real-estate assets starting from Dubai UAE.

Already MintLayer has received investments from a substantial number of venture capitalists including some residing in the UAE such as Phoenix crypto VC, Sheesha Finance, Varys Capital and others.

Zaid Ismail Chief Operations officer at MintLayer, based out of Dubai UAE, on LinkedIn states,“ 90% of the world’s millionaires made their fortunes through real estate, but it’s highly inaccessible, illiquid, and complicated – that’s where MintLayer comes in! Starting with Dubai, we are on a mission to fractionalize real estate ownership one country at a time.”

In an interview on Bitcoin News, he discussed how tokenized real-world assets are an appealing portfolio for modern investors.

He told Bitcoin News that despite recently garnering much of the world’s attention, traditional exchange-traded funds (ETFs), including spot Bitcoin ETFs, are still inferior to tokenized real-world assets (RWA).

He added,” Tokenized RWAs also come with increased transparency, reduced costs, and direct ownership making them a more versatile and appealing choice for modern investors seeking portfolio diversification.”

He notes in the interview that traditional finance institutions are also starting to get involved in tokenized RWAs. They are testing the waters and will need to work with regulators to adapt existing regulations to the changing landscape.

Ismail emphasizes that with MintLayer the process is simplified, reducing hassles for asset owners. With MintLayer, tokenization is embedded and simple, so non-technical users can issue tokens easily without having to use deployment contracts like on Ethereum.

Additionally, Mintlayer Institutional is building a SaaS platform for institutional clients that will help to simplify the process of issuing, monitoring and dealing with all the compliance aspects required for tokenization.

The MintLayer network, and its UTXO infrastructure, allows batching multiple transactions into a single one, saving space and lowering the fees. Furthermore, their HTLC smart contract embedded in MintLayer will allow atomic swaps and lightning network integration, allowing a way to route transactions on a peer-to-peer network that doesn’t require it to be permanently saved forever on the blockchain.

Mintlayer has a  low node requirements are pivotal in fostering a more inclusive and decentralized network allowing anyone with a standard PC, or even a Raspberry Pi, can run a node is a testament to the democratization of blockchain technology.

Flare Blockchain adds Google Cloud as 100th Validator

Flare Blockchain adds Google Cloud as 100th Validator

UAE Flare Blockchain is looking more like a torch these days. In the latest of a series of announcements, Flare, better known as the blockchain for data an EVM smart contract platform, has added Google Cloud as both a network validator and contributor to the Flare Time Series Oracle (FTSO) on the flare network.

So far Flare Blockchain has added 100 organizations as validators and contributors to the FTSO on Flare. These 100 Flare infrastructure providers support both the security of the Flare network as validators and contributers to the decentralized price oracle.

As a network validator, Google Cloud will be responsible for proposing and validating new blocks to the Flare blockchain, thereby supporting the chain’s proof of stake consensus mechanism.

The infrastructure provider role is critical for Flare’s mission to provide decentralized applications on both Flare and other chains with high quality access to decentralized data: price and time series data, blockchain event and state data, and Web2 API data.

For those who don’t know, Flare, the company aims to bring together low cost EVM smart contracts with decentralized data, while giving developers and users trustless access to the broadest range of data, with scalability, low latency, and at minimum cost. According to Flare, this is achieved by utilizing the validators of the network to provide decentralized data to applications as part of a decentralized native oracle system.

Hugo Philion, Co-Founder and CEO of Flare who is based in Dubai UAE, stated, “As the blockchain for data, we are excited that Google Cloud is joining our existing decentralized network of infrastructure providers who contribute to Flare. Our work together will help deliver a more robust decentralized smart contract platform that places decentralized data at its core.”

“Although much of the existing utility in the blockchain space comes from the nexus of decentralized computation with external data, existing oracle systems suffer from meaningful drawbacks: they are hard to decentralize, expensive to use, difficult to scale and have high latency.” Philion said about the challenges of the decentralization of data access, before explaining how Flare’s dual-role approach addresses the issue:

“Because Flare’s oracles are built into the structure of the network, we are the only smart contract platform optimized for decentralized data acquisition and are able to give developers all the data they need to build new, more relevant use cases beyond financial speculation.”

James Tromans, Head of Web3, Google Cloud stated: “Data access at scale is important to increase relevant blockchain use cases and greater global adoption of the technology. Google Cloud becoming a validator on the Flare network will help support that mission.”

Back in November Flare partnered with Elliptic, to integrate Elliptics transactions and wallet screening capabilities into the Flare network. The partnership also allowed organizations building decentralized apps on Flare with access to Elliptic’s real-time wallet and transaction screening tools to uncover any links to illicit actors.

As part of the integration, Elliptic’s monitoring, compliance, and analysis software would support  FLR, the native asset of Flare. Financial institutions, businesses, and regulators as such could utilize these software tools to identify a full range of illicit activities, from small-scale fraud schemes and money laundering to sanctions evasion and terrorist financing.

Then Bitfrost wallet partnered with Flare to offer staking on Flare. As Bitfrost noted during the announcement, “ The introduction of staking on Flare Network is one of the many steps we are taking to ensure our users have easy access to the most advanced and secure crypto management tools in the market.”

Even Arkham intelligene platform for analyzing network data also decided to support Flare. Through the support, users of Flare have access to Arkham’s Intelligence Platform for analyzing network data, the Arkham Oracle for gaining actionable on-chain insights, and the Arkham Intel Exchange for bidding on and winning different Flare-related bounties and auctions. Arkham allows Flare users to maintain tabs on their portfolios and watch what the world’s best traders and investors are doing in real-time. 

As if that was not enough, Flare partnered with Kinetic, a lending and borrowing platform, to bolster the development of decentralized finance (defi) applications on the Flare network.  The collaboration aims to introduce lending and borrowing capabilities, deepen liquidity, and help build a robust defi ecosystem on Flare.

Under the partnership, Kinetic, backed by Rome Blockchain Labs, would provide  a seamless platform for Flare users to participate in DeFi activities and earn block rewards using their supplied digital assets. The platform will also utilize Flare’s native price oracle, the Flare Time Series Oracle (FTSO), to ensure accurate and decentralized price feeds for lending and borrowing activities.

The Flare ecosystem by the end of 2023 boasted of over 150 partners. Among the notable contributors are Metropolis World, Pangolin, BlazeSwap, Uppercent, Covalent, SubQuery, Atriv, aiPX, Punk Domains, Ankr, Arkham, Flarescan, Subsquid, Web3Auth, Etherspot, and Elliptic. Today in 2024 with the addition of Google Cloud, Flare boasts of 100 validators.

CoinMENA expands investor offering with Onramp Bitcoin

CoinMENA expands investor offering with Onramp Bitcoin

UAE and Bahrain regulated crypto exchange CoinMENA expands its family office, investor and institutional offering through a partnership with Onramp Bitcoin. Onramp is an international Bitcoin asset management company built on multi institutional custody.

Onramp’s platform provides best-in-class products and solutions for HNWI, Family Offices, and Institutions to onboard Bitcoin.

In addition the partnership aims to empower MENA investors with high-quality Bitcoin educational resources such as proprietary written research, rich video content and analytic tools.

Both companies are poised to explore innovative custody solutions designed specifically for institutional investors. The collaboration comes on the heels of Onramp’s recent announcement of a partnership with BitGo, CoinMENA’s current custody partner.

In a joint statement, CoinMENA’s founders, Talal Tabbaa and Dina Sam’an said, “We are excited because this partnership fills a market gap for premium Bitcoin market research, and aligns with our educational approach to empower regional investors to invest in Bitcoin based on sound logic and a deep understanding of its unique and fundamental properties. As Bitcoin evolves into a mainstream international asset class, providing insightful analysis becomes essential for investors and asset managers, guiding them in making confident, long-term investment decisions.”

Onramp Co-Founder and CEO Michael Tanguma added “Onramp recognizes that Bitcoin is a global asset, necessitating the broad dissemination of valuable Bitcoin-focused educational resources across the world – research, podcasts, webinars, data-driven tools like the Onramp Terminal – access to these types of high-quality materials, combined with a first principles approach to custody, is the recipe for successful long-term Bitcoin ownership. We are excited to partner with the team to provide tools and education to one of the fastest-growing regions in the digital asset space.”

This comes just after the USA regulators allowed the launch of Bitcoin ETFs.

Indonesian Hajj Pilgrims enjoy cashless Blockchain payments with WadzPay

Indonesian Hajj Pilgrims enjoy cashless Blockchain payments with WadzPay

A recent collaboration with Wadzpay Blockchain payments provider and  Indonesian BPKH(Badan Pengelolaan Keuangan Haji), is allowing Indonesian pilgrims undertaking Hajj and Umrah to Saudi Arabi to utilize cashless digital payment solutions.

BPKH performs Hajj Financial Management based on sharia principles, prudential principles, benefits, non-profit, transparency and accountability.

“We’re proud to join hands with BPKH in this transformative partnership. Combined with BPKH’s vision and WadzPay’s blockchain-based Pilgrim Program for payments, we aim to empower pilgrims, streamline transactions, and enrich their journeys,” said Anish Jain, Founder and Group CEO at WadzPay.

WadzPay shall serve as the overall program manager while BPKH plans an immediate pilot project through one of their member banks, aiming to make e-wallets accessible to the majority of pilgrims for the 2024 Hajj season.

WadzPay’s Private blockchain-based Pilgrim Payment Program is the world’s first cross border cashless Hajj and Umrah solution offering ease of operations for issuance institutions, pilgrims as well as merchants. The SaaS based platform can be easily leveraged by multiple issuer institutions in any country to link with the merchants in Saudi Arabia allowing pilgrims to top-up their e-wallets in the home country and spend like a “local” during the actual pilgrimage.

With this partnership, Indonesian banks will become early adopters of WadzPay’s future-ready offering.

“We’re thrilled to modernize Hajj and Umrah finances, enhancing welfare and pilgrim satisfaction. This partnership shall drive transparency and financial inclusivity,” said Muhammad Thabrani Nuril Anwar, Head of BPKH Collection Division.

WadzPay had previously partnered with Geidea in Saudi Arabia to implement the same solution.

WadzPay which has its MENA headquarters in UAE recently expanded into the European market. It registered a new legal entity, WadzPay Technology Netherlands B.V., with the Dutch Chamber of Commerce. WadzPay appointed Mr. Khaled Moharem, as President- Europe & MENA.

Turkey gives the UAE a run for its crypto status

Turkey gives the UAE a run for its crypto status

For as long as can be remembered, the UAE has been at the forefront of the crypto scene in the MENA region. To date it has outpaced most of the countries in the region, but it seems that Turkey is starting to give the UAE a run for its crypto status.

During the past several weeks many crypto related announcements have been coming out of Turkey.

The first which was interesting was the expansion of Turkish home grown crypto trading and mining platform to Brazil. Bitci aims to open a cryptocurrency trading platform in Brazil and then Spain.

Chief Executive Onur Altan Tan said in an interview that he hopes a Brazilian exchange will build on its tie ups with soccer clubs there, given that the company offers fan tokens.

He stated, “We are opening a crypto exchange in Brazil because we have valuable assets there. We have released fan tokens of Brazil’s national team and we have agreed with six other clubs.”

Tan said after Brazil and Spain, Bitci plans to open crypto exchanges in some countries in Central Asia, India and Russia in 2024. 

But that is not all that is coming out of Turkey. Turkish banks are also gearing up towards crypto. Turkish AkBank announced the acquisition of local crypto firm Stablex as it aims to become a key player in the digital asset space.

Then Garanti BBVA, another leading Turkish bank, launched its crypto wallet app the following day. The application has a cold wallet feature and allows users to send and receive assets like Bitcoin (BTC), USD Coin (USDC) and ether (ETH).

Turkey ranks among the top 20 countries in Chainalysis’ Global Crypto Adoption Index 2023.

Finally Turkey’s finance minister, Mehmet Simsek, recently announced that the nation’s crypto regulations are in their “final stages.” According to the report, these impending regulations are designed to mitigate the risks associated with trading in crypto assets and faciliatate the removal of Turkey from FATF (Financial Action Task Force) grey list.

The proposed regulations outline a licensing framework for digital currency asset trading platforms overseen by Turkey’s Capital Markets Board (CMB). This framework will introduce minimum operating standards, including specific requirements for founders and managers, organizational obligations, and capital stipulations.

As reported by Reuters, Simsek’s announcement reflects Turkey’s approach to integrating crypto assets into its regulated financial landscape.

This is happening while the UAE still lags behind when it comes to Central Bank framework for virtual assets payments, remittances and settlements. While many crypto exchanges in the UAE have received licenses, none have confirmed which banks they are working with when it comes to fiat and crypto on and off ramp.

In terms of traditional banks, again most UAE banks have stayed away from crypto. It hasn’t helped that the UAE Central Bank issued a new guidance on anti-money laundering and combating the financing of terrorism (AML/CFT) for licensed financial institutions (LFIs) with a focus on the risks of dealing with virtual assets.

Companies such as WadzPay still await the Central Bank framework that would allow them to move forward with their pilot solution with Dubai Duty Free for implementing a digital assets settlement platform. But so far the only partnership Dubai Duty Free has signed up with is AliPay allowing customers access promotions and pay with their home digital apps at duty-free stores at Dubai and Al Maktoum International airports.

Blockchain and digital assets enter the insurance sector in UAE

Blockchain and digital assets enter the insurance sector in UAE

The DFSA ( Dubai Financial Services Authority) the regulatory arm of Dubai’s International Financial center recently announced that it would be updating its crypto assets regulatory framework with new amendments that would cover crypto assets, crypto custody DeFi, stablecoins, crypto investment funds money laundering and terrorist financing, as well as blockchain and crypto in insurance

It is asking for feedback on its consultation paper by March 3rd 2024. One of the most interesting topics mentioned by DFSA was utilization of Blockchain and crypto in insurance.

The DFSA noted in their consultation paper that given that crypto tokens are being discussed in the context of insurance including the utilization of DLT (Distributed Ledger Technology), for insurance, as well as crypto tokens for denominating policies, receiving premiums and paying out claims, even underwriting risks in crypto market, has prompted DFSA to seek feedback.

DFSA is seeking feedback on market trends regarding underwriting Crypto Token specific risks and associated regulatory risks; regulatory risks, and the prudential treatment of crypto exposures where Insurers receive premiums and pay out claims in Crypto Tokens.

In parrallel BCG recently published an article on how insurance firms are utilizing metaverse and blockchain in their operations, and how this trend will grow.

According to BCG some firms use blockchain records to process claims and detect fraud, while others deploy the technology to offer customized insurance products. It is noteworthy that UAE’s Ministry of Health has utilized blockchain technology for some time now.

BCG believes there are six strategic opportunities for the insurance industry after BCG evaluated leading insurance companies on 43 relevant dimensions and found that insurance companies were not only willing but it was feasible for them to do so.

According to BCG, insurance companies can increase revenues by using blockchain technologies.

Blockchain technology-related revenues for the insurance industry are expected to rise from their 2022 level of $425 million to about $37 billion by 2030. This represents revenue growth of 70% per year.

BCG’s analysis found that 60% of insurance companies are already investing in blockchain, and 80% of their C-suite executives believe that blockchain can enable efficiencies. The increase in revenues is expected to develop within the broader context of a $708 billion revenue gain across all industries and regions from metaverse and blockchain technologies.

The many use cases for metaverse and blockchain technologies fall into six broad strategic opportunities that can unlock substantial business value.

Insure Digital assets

First it can create new revenue streams. Firms can underwrite policies that insure digital assets, such as non-fungible tokens (NFT) cryptocurrency investments, and cryptocurrency keys. Firms can also commercialize the assessment tools used to underwrite emerging risks.

Insurers can also create new revenue streams by developing offerings to address risks related to metaverse technologies. For example, virtual-asset policies can insure against risks such as cyber-attacks and data loses, which are inherent to virtual environments.

Smart Contracts for transactions

The second opportunity is smart contracts, programs stored in a blockchain that run when certain conditions are met and that keep a verified record of all related transactions, which can particularly help insurers expand their product portfolio.

Firms can use smart contracts to create new types of policies that can be activated and deactivated on demand. Specialized underwriters can pool their knowledge to write multiparty insurance policies, each underwriting the risks with which they feel comfortable, and use smart contracts to manage the complexity. And carriers can use smart contracts to offer inexpensive contingency-based insurance for many small risks that would otherwise be difficult to insure. For example, companies could cover short-term work engagements for freelancers, one-time events for commercial venues, seasonal residential rentals for homeowners, and transactions by drivers working with ride-sharing services.

Improved underwriting

Insurers can also improve Underwriting and Claims Processes. Insurers can use blockchain and metaverse technologies to improve some underwriting and claims processes. In doing so, companies can improve the reliability of customer data, reducing existing loss ratios and decreasing the risk profile of the entire portfolio.

By implementing blockchain, an insurer can access the end-to-end record of an insured object’s life cycle, enabling more accurate underwriting and preventing fraud. An insurer can not only store the current value of the insured object but also trace back its provenance, seeing the object’s value whenever it was bought and sold. The insurer will also be able to see its value at the time of all subsequent transactions.

Detect frauds, settle claims

In addition Blockchain systems can help detect fraud by assessing data reliability, thereby avoiding settlement costs for false claims. The systems can also reduce the costs associated with high-volume, low-value claims by making it easier to manage them. Additionally, the automated ledger and tracking inherent in blockchain systems can streamline operational inefficiencies and reduce delays in settling claims. The latter two benefits are possible given the immutability of a blockchain ledger and blockchain’s capability to monitor policyholders’ digital identities using digital identity wallets.

OneDegree in UAE to insure digital assets

The announcement made by DIFC comes just after Hong Kong based digital asset insurance provider, OneDegree, announced it was expanding its offering to the UAE through a local partnership with Dubai Insurance Company.

Both UAE local entity and OneDegree will insure digital asset firms in the UAE using its OneInFinity product offering.

OneDegree is in the process of setting up its entity in Dubai UAE. The company will offer several types of insurance required by the Virtual Assets Regulatory Authority’s (VARA) new cryptocurrency regulatory regime in Dubai, including commercial crime insurance, professional indemnity insurance, and directors and officers insurance.

Conclusion

The discussion both on a regulatory level, as well as in terms of partnerships on the ground in UAE for implementing blockchain and crypto in the insurance industry, is a reflection of the readiness the UAE is at in terms of digital asset adoption.

For many when insurance companies start ensuring crypto, NFTs, and digital assets that means the technology and the regulations around it have become mature, and is a pre-requisite for the onbaording of institutional investors.