Middle East

The Middle-Eastern Crypto Scene Overviewed Ahead of Dubai World Blockchain Summit

On October 24-25th, Dubai will host the World Blockchain Summit (WBS) under the patronage of Smart Dubai, a government entity which goal is to make Dubai the safest and most innovative city on Earth. 

What is it ?

Dubai World Blockchain Summit is part of a series of events organized around the world by Trescon, a global business events and consulting firm based in India. 

During this two-days event, attendants will assist to conferences, start-up exhibitions, a pitch competition for blockchain start-ups aiming to raise funds with a $ 1 million check for the winner and an “ICO grand slam”, where companies prepared or planning to launch their ICO can pitch in front of global investors.

Last year’s edition attracted over 1000 participants with interventions from key government officials and blockchain experts.

Why it matters

This month, speakers will include Marten Kaevats (Estonian National Digital Advisor), Bitange NDemo  (Kenyan Chairman of Blockchain and AI Taskforce), Vit Jedlicka (President of Liberland), Roger Ver (CEO of bitcoin.com), Anthony « Pomp » Pompliano (Founder and Partner of Morgan Creek Digital Assets) and Dr. Marwan Alzarouni (CEO of the Dubai Blockchain Center) among others. 

The main discussion panels will tackle a few of the most topical issues and phenomenons in the crypto-sphere today. But specifically, our take is that the two core topics of interest during this summit will be the regulatory approach of governments and public sector applications of blockchains and digital assets, and the attraction it finally exerts on institutional investors. An « All Government » panel will be held with speakers representing several governments around the world.

The evolution of financial regulations, projects of state coins to compensate for a national currency’s hyperinflation or international sanctions and digital government infrastructure experiments have made the news this year. In spite of the bear market that has seen most of the cryptocurrencies decline since last winter, 2018 has been the year of institutional actors changing stance on the sector and embracing this market that has become more mature. More than 700 banks and 22 countries are testing blockchain for payments, in an increasing trend. 2018 has seen more major developments in terms of crypto market infrastructure than it has since its inception in 2009. 

The Dubai WBS takes place in a region of the world that is witnessing major moves in the field of blockchain, with a strong financial excellence tradition, massive investments in digital innovation and interested governments. 

The regional context

While a few Middle-Eastern countries with various strategies and agendas still express mistrust in the cryptocurrency and blockchain world, major updates have been unveiled recently by governments, companies or individuals with regards to these matters.

The United Arab Emirates are the leading nation in the Middle-East when it comes to blockchain.  The capital Abu Dhabi’s financial authority, Abu Dhabi Global Market, has released a regulatory framework for spot crypto asset activities in June after a public consultation. The aim was to take the lead in terms of governance, control and transparency in the market while attracting investors and innovation. Dubai Department of Finance also partnered on September 23rd with Smart Dubai Office to launch a blockchain-powered payment system for government entities, such as the Dubai Police, Roads and Transport Authority and Dubai Health Authority. This will enable real-time and transparent payments. A significative improvement compared with the current 45 days on average to complete a transaction between and within a public entity. 

Back in October 2016, Dubai launched a city-wide Blockchain Strategy with the aim of becoming the first blockchain-powered city in the world by 2020. In April 2018, the UAE Government launched the Emirates Blockchain Strategy 2021with the aim of proceeding 50% of public transactions through the blockchain by 2021.

Meanwhile in Saudi Arabia, the Central Bank, known as the Saudi Arabian Monetary Authority (SAMA), has joined RippleNet for its international payments in February. It was followed by the country’s first bank, the National Commercial Bank in September. This major move allows Saudi banks to settle instant, transparent and cheaper cross-border transaction. At Ripple’s Swell conference on October 3, Mohsen Alzaharani, the Director of Innovation at SAMA, confirmed that Saudi Central bank is testing a private digital currency for cross-border transactions on the blockchain. 

On another vein, Iran announced in August that it would soon launch a national cryptocurrency, backed by Rial and developed on the Linux Foundation Hyperledger Fabric technology. Notably, this national cryptocurrency will not be minable. No schedule has been given but the aims seem to be to avoid US sanctions and compensate for hyperinflation. However, a Rial-backed state coin wouldn’t be of more use than the Rial itself. The government has failed to tackle hyperinflation and tries to manipulate its national currency for communication reasons. The Central Bank of Iran should also soon release its final stance on the use of mainstream cryptocurrencies, which was due to be announced at the end of September. It remains forbidden to trade cryptocurrencies in Iran even though there is a small black market but the situation may evolve. The government recently authorized the mining of cryptocurrencies, causing a ris ein the volume of bitcoin trades in the country.

Qatar is among the numerous states where the maxim « Bitcoin bad, Blockchain good » is relevant. Though cryptocurrencies remain banned, it harbors several blockchain startups and hosted its first Blockchain conference in Doha on 1-2 October. 

In September, Dr. Abdulhussain Mirza Bahrain Minister of Electricity and Water Affairs said at SmartSec Cyber Security and Blockchain Conference 2018, a conference that took place in Manama, that Blockchain has, in his view, a great potential, especially in its ability to protect user’s data and facilitate transactions. The ministry added that businesses and entrepreneurs should explore the blockchain, calling it a “true mark of progress”.

The Dubai World Blockchain Summit could have a positive impact on neighboring countries, and give them some ideas, both at the public level and within private ecosystems. Some announcements may impact the markets: prick up your ears !