The Emirates may have been less responsive than others to take action on the disruption happening with financial technology, but in the last year, along with the growing enthusiasm showed by the local environment of finance pioneers and investors, we have seen a good number of new initiatives that should catalyze the local digital finance market to scale.
The nascent stage of the local market and the regulation of the fintech market are seen as some of the biggest challenges, but things are now changing.
Fintech Regulation Laboratory in Abu Dhabi
The Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market (ADGM), has released a consultation paper at the start of September, in order to get feedback and comments on the presented Regulation Laboratory (RegLab). This legislative framework, which is expected to take effect by end of 2016 and is something similar to the fintech sandboxes previously adopted by other countries including Singapore, the UK and Australia. The RegLab aims to encourage local innovation by giving firms the opportunity to test new digital finance products or business models without going through the full regulatory process. “We were very pleased to receive positive and constructive feedback from local and international participants on our earlier policy consultation of the FSRA RegLab initiative. The global FinTech hubs have also been supportive in our initiative to develop a progressive and sustainable FinTech eco-system in this region. We will continue to welcome firms to create and deploy new technologies, create new growth opportunities and enhance the quality and efficiency of the financial services sector in Abu Dhabi.” said Richard Teng, CEO of Financial Services Regulatory Authority (FSRA).
Dubai Government and Blockchain
It’s not only Abu Dhabi that is making progress with their financial technology ecosystem in the area. Dubai as well is turning up the rivalry with their neighbors to become the fintech hub of UAE and Middle East.
The Crown Prince, Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, announced that Dubai will become the first government in the world to execute all its transactions on Blockchain by 2020. With this strategy the government hopes to reduce CO2 emissions and create 25.1 million hours of economic productivity each year in savings.
“Users will only need to log in their personal data or business credentials once; it will then be updated and verified in a timely manner through the blockchain network in all government and private entities including banks [and] insurance companies.” said Mohammed Al Gergawi, the Minister of Cabinet Affairs in the Federal Government of the UAE.
Originally published at news.crowdvalley.com.