UAE has a fertile environment for digital assets, Crypto.com chief says

There is strong willingness by the government to invest in blockchain and Web3, Eric Anziani says at Investopia summit

The UAE has a regulatory framework that is attractive for cryptocurrency companies, experts have said. Bloomberg

The UAE has a fertile environment for cryptocurrencies, strong willingness by the government to invest in blockchain and Web3, and a fit-for-purpose regulatory framework, said Eric Anziani, president and chief operating officer of cryptocurrency exchange Crypto.com.

“In emerging markets such as Latin America and Turkey, there is a strong push for stablecoins by customers due to the hyperinflation these countries have gone through,” he said during a panel discussion on FinTech at the investment conference Investopia in Abu Dhabi on Thursday.

“Governments have to catch up to protect customers. Stablecoins have played a big role in such markets. These assets help preserve value amid hyperinflation.”

Investopia was launched by the UAE in 2021 and this year's event is being held under the theme “Envisioning opportunities in times of change” in partnership with the Abu Dhabi Department of Economic Development.

It is one of the events within the first set of the Projects of the 50 developmental and economic initiatives announced by the government in 2021 to accelerate the nation’s growth over the next five decades.

The UAE, the Arab world’s second-biggest economy, is exploring future investment opportunities.

This comes after the Covid-19 pandemic transformed economies, paved the way for new sectors, hastened the use of advanced technology and raised the need for sustainable growth.

The global FinTech market is expected to grow at a compound annual rate of 11.9 per cent between 2022 and 2027 to more than $266.9 billion by 2027, according to a report by Expert Market Research.

FinTech start-ups led in both funding and number of deals in the Middle East, Africa, Pakistan and Turkey region last year, according to data from Magnitt. The sector’s funding stood at $2.25 billion across 351 deals in 2022.

The Covid-19 pandemic hastened the adoption of FinTech, Sameh Al Qubaisi, board member of Abu Dhabi-based digital lender Wio Bank, said at Investopia.

“Mobile adoption in the UAE today is almost 90 per cent. The UAE ranks No 1 in technology usage and 13th globally, according to IMD World. This is a big leap,” he said.

Mr Al Qubaisi said Wio Bank was launched last year to solve problems for small and medium enterprises, many of which are unbanked.

The digital lender has onboarded 10,000 SMEs, which account for about 98 per cent of companies operating in the UAE.

Meanwhile, Chika Uwazie, co-founder of Afropolitan, a community-as-a-service company, said blockchain technology was becoming more popular among the African diaspora.

“There is a huge diaspora community for Africa. About $70 billion is sent back to Africa every year,” she said.

“A lot of Africans in the diaspora are using USDTs and other stablecoins to send money back home.”

Ms Uwazie suggested that blockchain technology could be used to pull money together to invest in the African continent, which is suffering from a funding crunch.

Jamie Thomson, chief executive of non-fungible tokens marketplace VulcanForged, said the “most beautiful thing” about the blockchain industry is the transparency in which users can see it evolve.

“It was only four years ago that we found that blockchain and cryptos could be used for other purposes than trading and transferring value in money transactions,” Mr Thomson said.

“Investors then toyed with the idea of entertainment in blockchain through NFTs. Play-to-earn cryptos was the next big thing in blockchain adoption. Then the concept of metaverse blew up. Now, we are just coming out of the play-to-earn myth.”