The role of cryptocurrencies in the UAE economy

It's no secret that the UAE is one of the most economically developed countries in the Muslim world, positively assessing the prospects of cryptocurrencies. While other governments are still pondering the viability of digital finance, UAE is already using this alternative to traditional currencies and setting new economic benchmarks.

Having earned a reputation as one of the most blockchain-friendly countries in the world, the UAE sets an example for others to follow. With a passion for everything related to physical technology, the visionary rulers of the country adhere to an active approach to decentralized finance and innovative technologies.

Dubai and Abu Dhabi already have a regulatory framework that encourages the creation of exchanges and companies related to cryptocurrencies, while ensuring the protection of customers and consumers. Thanks to blockchain technology with its fraud prevention and transparency capabilities, the UAE crypto market is gaining the trust of local and international investors. It is predicted that by the end of 2022, more than 1,000 companies will be opened in Dubai, whose sphere of activity will be blockchain and cryptocurrency operations.

Economic zones such as Dubai World Trade Centre (DWTC) and Dubai Multi Commodities Centre (DMCC) offer many advantages to those who want to open a crypto business in the Emirates:

• Regulatory framework in accordance with the agreement with the UAE Securities and Commodities Authority;

• Individual, SCA-approved crypto licenses;

• Easy integration of crypto business with minimal corporate taxes;

• Access to a growing pool of crypto and blockchain projects.

According to a study conducted by the Telecommunications Regulator of the United Arab Emirates, the State Regulatory Authority in the field of Telecommunications and Digital Technologies (TDRA), about 11.4% of the country's residents own cryptocurrencies or have invested in them.

40% of the country's residents aged 18 to 35 want and plan to use cryptocurrencies to pay for goods or services over the next year. And 54% of consumers aged 18-35 either own or plan to own crypto assets in the next 12 months.

The growing popularity of cryptocurrencies opens up opportunities for trading companies. Almost two thirds (73%) of sellers operating in the UAE who have offered cryptocurrency as a means of making transactions for customers over the past 12 months said they had positive marketing results, 80% saw positive mentions in the press and social networks, and 82% said they managed to attract new customers. Research also shows that 81% of the country's residents would be interested in buying cryptocurrency if it was offered by traditional banks.

It is obvious that the use of cryptocurrencies and their penetration into the lives of ordinary citizens of the country creates prerequisites for economic growth and the innovations development.