Thanks to planning and excellent infrastructure, Dubai maintains its position as the world’s Web3 center
Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of The Executive Council, recently launched Dubai’s Metaverse Strategy, which positioned the city as a pioneer by providing one of the world’s most advanced and related ecosystems for the metaverse community to thrive.
The move reconfirms Dubai’s position as a global hub for sophisticated technologies, particularly artificial intelligence (AI) and Web3. Dubai’s legislative climate and technology infrastructure have drawn numerous major Web3 players, including cryptocurrency platforms, blockchain startups, and tokenization corporations.
Dubai already has over 1,000 enterprises in the metaverse and blockchain sectors, and their present $500 million contribution to the UAE’s economy is expected to grow dramatically. The Dubai Metaverse Strategy seeks to create over 40,000 online jobs by 2030 and add $4 billion to the Dubai economy in five years.
The emirate is making significant progress with its metaverse plan, announcing the formation of a Higher Committee for Future Technology and Digital Economy, which Sheikh Hamdan will chair. The committee will develop policies, analyze trends, and oversee the implementation of the digital economy and future technology strategies such as the metaverse, artificial intelligence (AI), Web3, blockchain, cloud computing, data centers, virtual reality (VR), augmented reality (AR) and the Internet of Things (IoT).
Dubai’s metaverse dominance
Dubai is the first and only jurisdiction in the world to establish dedicated virtual assets regulations. His Highness Sheikh Mohammed bin Rashid Al Maktoum, the Vice-President and Prime Minister of the UAE passed Dubai’s Virtual Assets Law (VAL) in March of this year, firmly establishing Dubai’s leadership in the field. The regulation provides much-needed investor safety, economic security, and market transparency. It is supported by fully traceable and non-deletable transaction records that meet AML-CFT requirements for worldwide interoperability in the quickly increasing arena.
In addition, the emirate is a pioneer in various new-age economic sectors, including FinTech and eCommerce. Dubai is ranked #1 in the Middle East and 18th internationally in the Economist’s Digital Cities Index 2022. Dubai is ranked in the Top 10 in digital finance, highlighting the emirate’s leadership in blockchain, the engine that runs Web3, and the infrastructure that supports cryptocurrency and digital assets.
Putting together the regulatory jigsaw
The creation of VARA and the issuance of VAL are part of Dubai’s goal to become a worldwide hub for the rapidly rising digital assets sector. VARA is the preferred regulator for several of the world’s most reputable cryptocurrency players. With VARA and VAL, Dubai has positioned itself at the forefront of the virtual assets market. It will continue to play an essential role in its growth, evolution, and regulatory future.
The Dubai Metaverse Strategy and the Dubai Blockchain Strategy, both pieces of the policy and regulatory puzzle aim to establish Dubai as a global center for developing technologies. The Dubai Blockchain Strategy is one of many efforts, with 24 blockchain use cases now being deployed across eight important industrial areas such as finance, education, and real estate.
Because of the volatile nature of crypto assets and a presumed lack of accountability, many worldwide authorities have hesitated to embrace the developments, with some destinations applying punitive taxation, if not simply prohibiting it. Cryptocurrencies, led by Bitcoin, have experienced significant price corrections this year, as have the global bond and equity markets. However, according to industry analysts, investment interest in digital currencies is far from a fad, with inflation forcing many investors to investigate digital assets as a viable hedge actively.
“Dubai is committed to enabling economic freedom in the metaverse and empowering its stakeholders, including individuals, innovators, market makers, and virtual assets service providers. VARA wants to establish and enable the safe adoption of industry best practices, encourage knowledge-sharing and drive global interoperability while raising awareness,” said Helal Al Marri, Director General of the Dubai World Trade Centre Authority that houses VARA.
The industry has seen an increase in both institutional and private capital. The crypto market is the fastest growing among digital assets. According to Chainalysis, total transaction volume increased 567 percent from 2020 to $15.8 trillion in 2021. According to Technavio, the global NFT market would expand by $147.24 billion at a CAGR of 35.27 percent between 2021 and 2026.
“Digital assets are playing an increasingly crucial role in DMCC’s mandate to boost trade through Dubai,” said Ahmed bin Sulayem, Executive Chairman and CEO of DMCC. The DMCC Crypto Centre, which now houses over 400 of the UAE’s crypto enterprises, provides a comprehensive ecosystem to assist the development and implementation of cryptography and blockchain technology. The Crypto Centre works closely with the Dubai government to provide a stable operating environment that places the emirate on the global crypto stage. anf provides access to finance, opportunities, talent and resources.