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Dubai’s rapid development and receptive environment
Since the 1960s under the rule of Sheikh Rashid bin Saeed Al Maktoum, the Emirate of Dubai has developed the city of Dubai at an extraordinary pace, culminating in the phenomenal growth seen over the past few decades. From a humble trading port, Dubai has become one of the most popular luxury tourist destinations in the Middle East, in addition to the region’s undisputed status as a financial hub.
To achieve such rapid development, the emirate’s leadership not only poured in abundant investment funding (mostly derived from the oil discovered off the coast of Dubai in 1966), but also created numerous special economic zones throughout the city to encourage the growth of business and to attract foreign investment. As a result, numerous technology, financial and media companies have been established in Dubai, forming a receptive environment for Bitcoin.
Dubai and UAE embrace blockchain technology
According to the UAE’s ambitious Blockchain Strategy 2021, announced in April 2018, the region intends to become the world’s first “blockchain government”, with half of federal transactions conducted via cryptocurrency by the aforementioned date. In July 2021, the state-owned bank Emirates NBD in Dubai and the Ministry of Economic Development launched a KYC (Know Your Customer) platform based on blockchain technology. This system already has hundreds of participating companies and promises to speed up all kinds of financial processes in the country.
As part of the Prince of Dubai’s Dubai Blockchain Strategy announced in 2016, a number of blockchain-based initiatives were launched. These initiatives aim to improve government efficiency, legal processes, public happiness and the ease of doing business. These initiatives include:
- Smart Dubai: It transfers administrative functions such as invoicing, visa application and license renewal to a blockchain system by 2020, reducing costs and increasing efficiency.
- The Blockchain Court: It aims to bridge the gaps between the traditional legal system and blockchain-based smart contracts, initially focusing on reducing paperwork and improving legal efficiency.
- The Dubai Blockchain Business Registry Project: Developed in partnership with IBM, it creates a blockchain-based Unified Trade Registry to better issue, store and manage trade licenses, starting with the Dubai Silicon Oasis Free Zone.
- Dubai Land Registry Blockchain Property Database: Records property ownership, provides property-related remittances, and facilitates communication between property owners, tenants, and utility providers.
In May 2020, Dubai’s port operator, DP World, adopted TradeLens, a blockchain-based shipping and supply chain platform developed by IBM and Maersk.
Bitcoin is considered halal according to Sharia
In April 2018, Bitcoin was declared Shariah-compliant, opening the door to Bitcoin and cryptocurrency investment by Muslims around the world. Note that this statement should not be assumed to cover every cryptocurrency as some contain an element of interest earned on loans.
Legal and Tax Status of Bitcoin in Dubai
Although Dubai and the UAE have clearly adopted blockchain, the legal and tax status of Bitcoin in Dubai is still somewhat unclear. Although the UAE central bank’s decision initially banned “virtual currencies”, the central bank governor clarified that the ban does not extend to cryptocurrency. Buying and selling bitcoins is considered a “tolerated practice” within the UAE, with regulators not prosecuting those who trade in it. Dubai’s Financial Services Authority has warned of the high risk of cryptocurrencies, but does not regulate them. The taxation situation regarding cryptocurrencies is currently unclear and further legislation is expected to clarify the legal status of Bitcoin in Dubai.
Conclusion
Dubai is likely to emerge as a regional or even global leader in implementing blockchain technology. The Emirate’s rapid development, receptive business environment and ambitious blockchain initiatives are ushering in significant growth in the cryptocurrency space. The UAE Blockchain Strategy and various government-led projects demonstrate a commitment to embracing the potential of blockchain technology.
How to Buy Bitcoin in Dubai and UAE
Coinmama allows people in Dubai and the UAE to buy bitcoins via bank transfer or with a debit or credit card issued by VISA or MasterCard. If you want to buy bitcoins in Dubai, click here and follow the simple steps to get started.
With the right knowledge and a trusted platform like Coinmama, you can participate in the exciting world of Bitcoin and contribute to Dubai’s journey as a leading blockchain hub.
Curious Inquiries: Delving Deeper into the Blockchain Landscape in Dubai
1. How does blockchain technology benefit government processes in Dubai?
Blockchain improves government efficiency by digitizing administrative functions (invoicing, visa applications, license renewals) and legal processes. This not only reduces costs, but also increases operational efficiencystreamlining public and business transactions in Dubai.
2. What Makes Bitcoins Sharia Acceptable in Dubai?
In April 2018, Bitcoin was declared Sharia-compliant, mainly because it does not include interest on loans, a key factor that is in line with Islamic financial principles. This declaration increases the acceptance of Bitcoin among Muslim investors.
3. What is the legal status of Bitcoin in Dubai and UAE?
Although the initial stance on virtual currencies was overwhelming, the UAE central bank has clarified that this does not apply to cryptocurrencies such as Bitcoin. The practice of buying and selling bitcoins is toleratedwith the legal and tax implications still evolving as the region adapts to this new asset class.
