The Finance World Magazine| Edition: April 2023

Cryptocurrency can potentially
revolutionize e-commerce in the UAE by
offering a secure and efficient payment
method that can be used globally.
the UAE has the potential to disrupt
trade and payment systems in several
ways, some of which are the following
scenarios:
International Trade: Cryptocurrency
can potentially simplify international
trade transactions by eliminating the
need for intermediaries such as banks
and currency exchanges. This can
reduce transaction costs and speed up
the settlement process. Additionally,
cryptocurrency can help to mitigate
the risks associated with cross-border
payments such as currency fluctuations,
geopolitical risks, and fraud.
Remittances: The UAE has a large
population of expatriate workers who
frequently send money back to their
home countries. Cryptocurrency can
provide a cheaper and faster alternative
to traditional remittance channels, which
are often costly and slow. This can be
particularly advantageous for low-income
workers who depend on remittances as
a significant source of income.
E-commerce: Cryptocurrency can
potentially revolutionize e-commerce in
the UAE by offering a secure and efficient
payment method that can be used globally.
This can enable businesses to expand
their reach and access new markets
without dealing with the complexities
of traditional payment systems.
Financial Inclusion: Cryptocurrency
can provide an alternative means of
payment for individuals and businesses
who are not served by traditional financial
institutions. This can help to promote
financial inclusion and enable people
to participate in the economy.
However, the cryptocurrency scene
in the UAE has witnessed some changes
recently, one of which is what happened
with FTX and Kraken, two of the world’s
biggest cryptocurrency exchanges; FTX
became embroiled in an international
scandal and declared bankruptcy before
it could establish a presence in the area
last fall, while Kraken revealed this month
that it would halt its AED services.
Since Abu Dhabi and Dubai have high
ambitions to make the UAE a global crypto
hub, how can the latest changes affect the
overall cryptocurrency landscape in the
country? Jehanzeb Awan, Chairman of
the Crypto and Blockchain Association,
Middle East, Africa & Asia (MEAACBA),
said that “There will always be change
in crypto blockchain because it is a new
and developing sector; however, it is
very important not to focus on cryptoexchanges,”
because they are “just a
small part of the overall ecosystem.”
Awan also stressed that the UAE is a hub
of innovation for the crypto-blockchain
ecosystem, covering everything from
regulation and education to assistance,
which helps to “stimulate the sector
across the region.”
In that sense, the departure of FTX and
Kraken may create a larger opportunity
for those that have stayed, with Binance
being the most apparent example. Binance
acquired its initial license in Dubai in
March 2022 and obtained its Financial
Services Permission from Abu Dhabi in
November.
H. E. Thani Al Zeyoudi, UAE Minister
of State for Foreign Trade, talked about
cryptocurrency during an interview with
Bloomberg in Davos, Switzerland. He
stressed that “Crypto will play a major
role for UAE trade going forward,”
and he emphasized that the country is
“attracting some of the companies,” with
aim of building “the right governance
and legal system.”
From his side, H. E. Omar Sultan Al
Olama, UAE Minister of State for Artificial
Intelligence, Digital Economy, and Remote
Work Applications, reemphasized that
“The UAE has not issued a single licensed
crypto exchange in UAE, neither Binance
nor FTX.” The Dubai Virtual Assets
Regulatory Authority (VARA) is responsible
for licensing and regulating the crypto
April 2023 www.thefinanceworld.com 55