The Future of Cryptocurrencies in the UAE

With Bitcoin blooming late last year and earlier this year, a lot was happening in the Blockchain front. Many have argued about its legality and authenticity, but in the end, everyone is ready for the change.

In the latest Arabian business podcast, regional experts believe that blockchain technology will soon transform business operations in several sectors. However, the claim that the initial coin offerings (ICOs) are currently nothing more than unregulated IPOs.

Despite the failure on many occasions of ICOs spates in recent months, Tobias Young, the head of hydrocarbons at Dubai Gold & Commodities Exchange, said: “There’s no one saying what the rules are or how they work. Regulation is what's going to help us avoid this.”

“Blockchain can change the whole way we are doing remittances. This is a $630 billion a year industry with an annual growth of seven per cent. But to do cross-border payments, it’s very complicated process. With blockchain it would be a simple transaction-based settlement which is a revolutionary way of looking at things.” said Osama Al Rahma, the vice chairman of Foreign Exchange & Remittance Group and CEO of Al Fardan Exchange.

He stressed that blockchain has a considerable role to play once the rules of the game are made. Like in the most countries across the world, the impact and legalisation of cryptocurrencies in the UAE are still in the initial stages.

The main issue stands that the Central Bank of the UAE's Regulatory Framework for Stored Values and Electronic Payment Systems makes it very clear that all virtual currencies are prohibited. In other words, they are illegal to be bought, sold and exchanged in the country.

However, the UAE and Saudi Arabia have revealed their plans to implement their own cryptocurrency. The idea is to use and regulate them in the region.