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While the Middle East is still mostly apprehensive about cryptocurrency, it seems that the United Arab Emirates is taking a slightly more welcoming approach. The current financial structure of Dubai means that some banks are able to facilitate cryptocurrency transactions, although this privilege is not provided to all institutions. This means that the average Emirati citizen can buy cryptos, but it might still be a headache to do so. However, this could change and the situation could become much more relaxed as the Prime Minister of Dubai has announced long-term plans to bring blockchain technology to the country.
As all crypto fans know, when blockchain technology is embraced, crypto often follows too. The strategy outlined by the government plans for 50% of federal and industrial transactions to be handled through blockchain technology by 2021. This includes the transporting of paperless documents. To further this strategy, UAE has partnered with IBM to help the country regulate transactions and keep operations running smoothly during the transition period. To help with this project, Dubai has issued a division of their government, the Smart Dubai Establishment, to plan for the implementation of blockchain services.
Interestingly, while a major focus on blockchain technology is being placed in the government, the regulations regarding actual cryptocurrency is still confusing and murky. Current financial legislation does not cover or recognise cryptocurrency as money. However, an official recognition of Bitcoin and other coins could be in the works.
Currently, many believe that when UAE decide on an official stance, they may choose to only allow local cryptocurrency exchanges to operate within the country. This type of behavior is partially happening in Afghanistan already as international exchanges are struggling to reach the country. It is also common for some Middle Eastern countries to try and keep their wealth within their borders. For example, it is illegal to take Morocco’s national fiat currency out of the country.
If this is the case, that will mean that only local Dubai exchanges will be able to facilitate crypto trades. This would be unfortunate as only a handful of local exchanges exist, and only some of them are trustworthy. However, it is not hopeless as the current governmental situation has led to the creation and rise of a thriving set of crypto exchanges which locals can take advantage of today. One of which is Palmex, which has trading pairs with fiat (Emirati Dirham) as well as 24/7 hour support. Palmex also contains advanced trading tools for day-traders.
Another exchange with headquarters in Dubai is RightBTC, which facilitates trades in popular coins such as Bitcoin, Ethereum, and Bitcoin Cash, but also houses much more obscure coins and tokens too such as CEEK and Utrum. This means that native Emirati users can depend on it for most (if not all) of their crypto trading behavior. The fact that RightBTC also runs regular airdrops helps to build trust among its fans.
While people eagerly wait to see what the United Arab Emirates decide to do with cryptocurrency, users can rest easily knowing that during this process, there are still a handful of local exchanges which they can regularly rely on.