Abu Dhabi launches blockchain and cryptocurrency body

Abu Dhabi has launched a new association backed by the emirate’s economic free zone to accelerate the development of blockchain and cryptocurrencies in the region.

The Middle East, Africa and Asia Crypto and Blockchain Association (MEAACBA), a non-profit organization supported by Abu Dhabi Global Market, aims to bring industry players together to discuss strategies and address the biggest challenges facing the industry, while integrating digital assets into in key economic sectors.

The ADGM-based association counts major cryptocurrency platforms such as Mubadala-backed MidChains, Dubai-based BitOasis, Bahrain’s Rain, Crypto.com and Binance, the world’s largest cryptocurrency exchange by trading volume, among its partners.

“The UAE is on its way to becoming one of the top international financial centers and we want to be a recognized contributor to the development of the diversified and sustained development of the UAE economy,” ADGM Chairman Ahmed Al Zaabi said during a speech at the launch event in Abu Dhabi on Tuesday.

“We strongly believe that the MEAACBA will constantly contribute to strengthening the UAE’s digital economy and adoption… and will have an impact in the region and globally.”

The move places Abu Dhabi and the UAE at the forefront of innovation, in line with the government’s aim to leverage the continued digital transformation to transition to a knowledge-based and smart economy.

Blockchain is the underlying technology behind cryptocurrencies and decentralized finance, which is generally considered a safer way to conduct transactions and one that could end up replacing middlemen, such as brokers and banks, in the financial system.

The United Arab Emirates has taken several steps to integrate blockchain into its economy, government and society as part of efforts to develop the economy of the future.

Blockchain in particular has gained particular focus, with a number of government initiatives established, including the Emirates Blockchain Strategy 2021 and the Dubai Blockchain Strategy, as well as the formation of the Global Blockchain Council.

Last year ADGM revealed its plans to double the number of cryptocurrency exchanges to expand online asset trading options for investors.

Global cryptocurrency exchanges such as Binance, Kraken and eToro have flocked to ADGM to secure operating licenses as they seek to tap the potential of the Emirates’ cryptocurrency market.

The UAE’s digital economy contributes 4.3 percent to the national economy, according to government data.

The Emirates has also moved up the ranks as a recognized global cryptocurrency center. It is now among the top five nations in terms of adoption, with annual transactions worth $25 billion, according to consultancy PwC.

Meanwhile, the wider Mena region is the fastest-growing cryptocurrency market in the world, accounting for 9.2 percent of global digital currency transactions from July 2021 to June 2022, according to blockchain data platform Chainalysis.

The global blockchain market is also booming and is expected to grow to $7.18 billion this year and $164 billion by 2029 at a compound annual rate of more than 56 percent, from about $4.7 billion in 2021, according to Fortune Business Insights.

The capital will also host the first Middle East Blockchain Awards at this month’s Abu Dhabi Finance Week.

The new association is keen to address the cryptocurrency sector’s challenges, especially now that it’s going through what’s being called a “crypto winter,” or a market cooling that dragged Bitcoin below the key psychological level of $20,000 in June and wiped out $2 trillion of the sector’s total market, sending it under $1 trillion.

Bitcoin, the world’s first and largest cryptocurrency, was trading about 5 percent lower at $19,773.73 at 2 p.m. UAE time on Tuesday, according to Coinbase.

“This is an extremely important time for cryptocurrencies. We have had some very nice springs and summers, but also quite cold and chilly winters,” said Jehanzeb Awan, chairman of the new association and founding partner and managing director of Dubai-based financial consultancy J Awan & Partners.

“Companies are built on principles, not seasons, so we need a lot of effort to bring all industry players together.”

The Association’s goals include developing educational campaigns and coordinating with local and global partners to develop frameworks for blockchain ecosystems that are accessible, transparent and adhere to industry standards.

This will involve collaboration with industry players in the participating regions, including exchanges, consultancies, technology developers, digital asset traders and companies engaged in the metaverse and non-fungible tokens.

“The only way we can run an effective ecosystem is to get everyone on the same page,” Awan said. “Of course we can’t solve all the problems, but we can sit down, discuss and point in the right direction.”

The association will also hold competitions to find companies to develop solutions for real economic problems. The winners will have an opportunity to receive industry support and connect with investors.

Updated: November 8, 2022, 11:20 am