How the Blockchain Revolution is Reshaping the Financial Landscape of the Middle East

The opportunity in Crypto, NFTs, and the Metaverse for the Arab Investor

Industry insiders have called 2022, the year blockchain comes of age in the Middle East. It has been a few months of reckoning, as many a city vies to become the blockchain hub of the region. The crypto ecosystem in the Middle East is developing at an unbelievable pace and will prove to be a gold mine for the bold investor. The region is at the forefront of emerging technologies and is welcoming digital innovation and disruption with open arms. 

The Gulf states have an admirable focus on expanding their digital economy while ensuring regulatory certainty. The momentum of investment is high and not surprising because whether it is UAE, Bahrain, or Saudi Arabia, the state is involved to ensure an infrastructure is in place for a successful blockchain transformation.  

Blockchain technology is a critical part of the fourth industrial revolution and its applications are wide ranging in industries such as: financial services, healthcare, government, logistics, and even data storage. Individual ecosystems in the Middle East are making way for real life adoption. Permissionless blockchains allow a high degree of transparency, immutability and decentralisation, which is why UAE and Saudi Arabia are researching the current and future applications of blockchain for government and commercial services. 

The Middle East is not simply riding the blockchain wave but is set to become a leader in the Crypto world.

The NFT and Metaverse Gold Rush

The hype around Non-Fungible Tokens (NFTs) is real, these digital assets have transformed the art world. Art lovers and other creatives in the Middle East have been quick to embrace these digital tokens. The Middle East has been no stranger to the aggressive momentum of NFT creation and sales that the world has witnessed. In 2021, three Middle East based NFT marketplaces raised $10 million. 

The digital art space in Dubai is especially fascinating. With the spending power of the young millennial and Gen-Z residents of Dubai, the city is all set to become a blockchain capital that is creating a bridge between art and the crypto sphere. Another feather in the city’s crypto cap is the launch of 100 paintings by world-renowned and Guinness record-holding artist Sacha Jafri. Each painting will have 5 renditions sold as an NFT each. Dubai’s unique reach to attract top talent in art and in technology is game-changing for investors, collectors and entrepreneurs. 

Some NFT galleries exist only in a digital space, i.e., the metaverse. The advent of the metaverse is seen by many as the next stage in the internet’s evolution, the internet of Value. Many international players see the Middle East as a rich playing field to establish a flourishing virtual reality market. Saudi Arabia has announced billions of dollars of investments in blockchain technology and metaverse development. The Kingdom has a clear strategy to diversify its economy by embracing digital transactions and investing in the metaverse.

Bahrain: At the Forefront of the Crypto Boom

Bahrain is a FinTech leader. It is emerging as a blockchain hub and creating an ecosystem where open banking and cryptocurrency thrive. Regulatory frameworks are flexible, and the country has a strong appetite for innovation and digital transformation. While many countries in the East are hesitant to uptake digital currencies, Bahrain’s central bank awarded the world’s largest crypto exchange, Binance, a license to operate. This marks the first regulatory approval for a Binance entity within the Middle East. 

If that wasn’t enough, Bahrain has its own crypto-assets trading platforms, CoinMena and Rain, which give the country access to European markets as well. CoinMena is the fastest growing exchange in the MENA region with an average rate of 140% month on month.

Dubai: The True Blockchain Powerhouse

Binance CEO, Changpeng “CZ” Zhao, recently tweeted a picture of him in an Emirati robe with a UAE flag emoticon. One of the richest people in the world and a blockchain magnate, Zhao’s enthusiasm to do business in Dubai only means that Dubai is an economic powerhouse to reckon with. FTX Exchange, another of the world’s largest cryptocurrency exchanges was recently granted a license to operate in the UAE too.

The UAE’s blockchain landscape is far more evolved than any other city because the Government is heavily invested in it. It is home to the Middle East’s fastest growing blockchain ecosystem: The Crypto Oasis. At the end of February 2022 the Crypto Oasis ecosystem was home to over 700 organisations and they expect that number to increase to over 1000 by Q2, 2022.

Top-tier crypto projects are relocating to the UAE in never-before-seen numbers. Voted the Accelerator of the Year at AIBC summit 2022,  UpLift DAO having launched the projects scaling in GameFi, dedicated NFT marketplaces, and AAA play-to-earn NFT games has recently launched its office in Dubai, setting out to enable the Dubai crypto scene.

Dubai’s openness to build a progressive regulatory environment for cryptocurrencies and other virtual assets deserves a special mention because it is the biggest incentive to invest in crypto in Dubai. 

Dubai is the epicenter of the Middle Eastern crypto ecosystem. Its collaborative leadership and their broad vision, has contributed significantly to the region’s growth and development. Last month, Dubai based venture capital firm Cypher Capital launched a $100 million blockchain fund.

The Digital Transformation of The Middle East Is Here to Stay

The private and public sectors are empowering themselves with digital disruptions. The hype of Blockchain and crypto won’t die away anytime soon, in fact, you can expect it to grow exponentially to match the size of investments and innovation in the Middle East. The Arab countries realise the value of blockchain and how digital transactions are revolutionary in every sense. 

As more Gulf states adopt and nurture blockchain, we will witness the market coming of age across the region, supported by a forward-thinking leadership and tech-friendly jurisdictions. With numerous opportunities and massive potential, the Middle East is at the forefront of the Crypto revolution.

Source: https://www.cryptopolitan.com/how-the-blockchain-revolution-is-reshaping-the-financial-landscape-of-the-middle-east/