Crypto Cities: Dubai
Cities are a breeding ground for technological innovation and digital advancements by offering a space for talent and businesses alike to come together and shape the future of their city. The rapidly evolving, constantly changing urban landscape offers exciting opportunities for digital innovation and new ways of doing things.
But what makes a city a crypto city? And how are crypto cities contributing to digital asset adoption worldwide? In this new series, we’ll be exploring the benefits cryptocurrency adoption can bring to constantly evolving cities in a rapidly changing global economy.
The Blockchain City: From Holiday Spot for the Super Rich to Tech Innovation Hub
A common misconception about Dubai is that oil sits at the centre of the city’s economy. In reality, the oil industry mainly centres around neighbouring Abu Dhabi. Due to this, Dubai has long been aiming to diversify its economy: from a holiday spot for the super-rich to a hub for digital assets and tech innovation, Dubai is betting on constant innovation in a rapidly evolving global world.
In 2017, the Smart Dubai Office in collaboration with the Dubai Future Foundation, launched the Dubai Blockchain Strategy. The strategy focuses on H.H. Sheikh Mohammed bin Rashid Al Maktoum’s vision of making Dubai the first ‘blockchain-powered city’ with the goal of having 50% of financial transactions done on the blockchain. The strategy will be focusing on three strategic pillars: government efficiency, industry creation and international leadership.
Hameed Taherdoost, professor at University Canada West, states: “The Dubai Blockchain [strategy] will provide economic opportunities to all business sectors in Dubai and cement Dubai’s status as a worldwide technology leader, in [line] with Digital Dubai’s objective to become a global leader in the smart economy, fuelling entrepreneurship and global competitiveness” (privatebankerinternational.com).
While the pandemic presented a struggle for cities and countries worldwide, Dubai saw an opportunity and laid the groundwork to attract new tech investment by offering low taxes and support in setting up new businesses. “Dubai, and the UAE overall, is a world-class example of dealing with a pandemic. Now you see talent internationally, from all parts of the world, wanting to move to Dubai,” said Ola Doudin, co-founder of BitOasis, a cryptocurrency platform (cnbc.com). The city embraces digital currency and innovation and it is this proactive and strategic approach that draws investors and companies to the city.
Geographically seen, the city boasts another benefit: strategically located between Europe, Asia, and Africa, the UAE and Dubai specifically have access to different key markets. The Dubai Multi Commodities Center states: “Dubai gives you access to 65% of the world’s GDP in 8 hours or less due to its location, which makes it a natural meeting point between Europe, Asia, Africa and the Middle East. This is both geographic and cultural, given that foreigners make up almost 90% of the population” (cointelegraph).
Dubai: The Crypto Hotspot in the Middle East
Crypto entrepreneurs have long benefited from Dubai’s zero-corporate tax fees. UAE residents in general pay 0% income tax, regardless of whether it was earned in the country or elsewhere. As of early 2022, there were already over 400 crypto businesses operating in Dubai, with the city wanting to double this figure in the near future.
The city’s low-tax and business-friendly regulatory framework have already encouraged crypto exchanges like OKX, Blockchain.com, and Binance to acquire licences to operate in the city. Singaporean exchange Bytbit even moved its global headquarters from Singapore to Dubai in March 2022.
Kearney’s Global Cities report has also ranked Dubai as the best city to live and work in the MENA region for eight years in a row. Its sunny weather, luxurious lifestyle and willingness to support and foster new ideas around tech and digital payments have made it a new home for many businesses and new citizens alike. Dubai’s innovative and forward-thinking mindset has made the city a hub for transformation and networking and has established a flourishing finance and tech industry known globally.
Dubai has hosted many tech and crypto summits in the past which have further put the desert city into the spotlight. AIBC, Crypto Expo Dubai, and the World of Web3 Summit are just some of the recent conferences that brought innovators from all over the world to the emirate to learn and discuss new ideas on the future of technology.
Crypto influencers and other wealthy investors or businesses have also been relocating to Dubai throughout the past years. Many believe that to build wealth, you have to surround yourself with it. And what better place to do so than by living in Dubai? By building a mega city known for luxury, innovation and networking opportunities, the UAE has created a strategically located hub that can bring many different markets together.
Why Every City Should be a Crypto City
Investment and venture capital firm Wamda states that in 2021 alone, $2.9 billion of investment was spent on start-ups in the Middle East and North Africa, with roughly 50% flowing into the United Arab Emirates alone. The number of general new business licences issued in Dubai reached nearly 25,000 in the first quarter of 2022, an increase of over 60% compared to 2021.
New businesses coming to the city ultimately mean new job opportunities for citizens. More conferences mean more visitors coming to the city and spending money, which in return supports locals and the city alike. Dubai’s focus on the metaverse and tech innovations and the encouragement of the growth of the cryptocurrency sector is estimated to create over 40,000 new jobs by 2030.
A 2022 report by the Economist called the Digital Cities Index has ranked Dubai first in the Middle East as a leading tech ecosystem and 19th worldwide for the most digitalised cities in the world. The emirate is the only Middle Eastern city to be highlighted in the index, which ranked 30 global cities across four key pillars: connectivity, services, culture and sustainability. Dubai’s high ranking was mainly due to its innovative mindset, digital skills, e-government and the support of digital payments and new forms of digital currencies.
With its geographically convenient location, business-friendly environment and low taxes, Dubai provides a unique base for new start-ups and established businesses looking to innovate the tech industry. Who thought just a decade back that we would see a migration of talented individuals with big dreams to a desert city? And that Dubai would be ranked as one of the top cities to live and work? The emirates’ support and innovative outlook on tech, web3 and digital assets have transformed the city and brought jobs and opportunities to many.
Dubai as a crypto city means opportunities, growth and transformation. The Dubai Migration is the first part of a larger technological and industrial revolution that will define our future and ways of doing things globally. As UAE Prime Minister and ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum put it: “The future belongs to whoever designs it” (voi.id).
If you missed the first edition of this series, please click below:
~Tina~
