Dubai is establishing itself as a global leader in the emerging metaverse community with the recent inauguration of the city’s Metaverse Technique by Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of The Government Council.
The shift further establishes Dubai as a hub for cutting-edge technologies, including artificial intelligence (AI) and the World Wide Web. Some of the biggest names in Web3 have set up shop in Dubai thanks to the city’s welcoming regulatory climate and advanced technological infrastructure. This includes cryptocurrency platforms, blockchain businesses, and tokenization firms.
Over a thousand metaverse and blockchain companies already call Dubai home, and their current contribution of $500 million to the economy of the United Arab Emirates is expected to grow significantly. The Dubai Metaverse Strategy aims to boost Dubai’s economy by $4 billion over the next five years and sustain over 40,000 digital jobs by 2030.
Rapid progress is being made in the emirate’s metaverse technology, with the establishment of a Sheikh Hamdan-led Supreme Committee for Future Technology and Digital Economy. The committee will create guidelines, conduct analysis of trends, and oversee the implementation of systems related to the digital economy and future technologies such as the metaverse, artificial intelligence (AI), blockchain, Web3, virtual reality (VR), augmented reality (AR), the Internet of Things (IoT), data centers, and cloud computing.
Management of the Metaverse in Dubai
In the history of the global economy, Dubai has taken the unique step of creating a regulatory body specifically for digital assets. His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, authorized Dubai’s Digital Property Regulation (VAL) and established the Digital Property Regulatory Authority in March of this year, solidifying Dubai’s position as the global leader in the field of digital property. With fully traceable and non-erasable transaction data that satisfies AML-CFT requirements for global interoperability in this rapidly developing area, the regulation guarantees much-needed investor safety, financial security, and market transparency.
The emirate has an opportunity to lead the way in several emerging business arenas, including financial technology and electronic commerce. According to The Economist’s Digital Cities Index 2022, Dubai is the best in the Middle East and 18th in the world. As one of the top 10 digital financial hubs, Dubai’s inclusion in the index highlights the emirate’s pioneering work in blockchain technology, the backbone of Web3 and the foundation upon which cryptocurrencies and digital assets rest.
Putting the regulatory puzzle together
Dubai’s plan to become a worldwide centre for the rapidly growing digital assets sector includes issuing VAL and establishing VARA. Many of the most well-known cryptocurrency players in the world prefer VARA as their regulatory platform of choice. Having established both VARA and VAL, Dubai has assumed a pivotal role in the growth, expansion, and future regulation of the digital belongings trade.
The Dubai Metaverse System and the Dubai Blockchain System are pieces of the puzzle that aim to establish Dubai as a global center for cutting-edge technologies. Twenty-four blockchain use cases are now being carried out across eight key industries, including finance, education, and real estate, as part of the Dubai Blockchain Method.
Many global countries have been hesitant to embrace the trends because of cryptocurrency’s dangerous nature and a perceived lack of transparency, with some locales even implementing punitive taxation, if not outright prohibiting it. The global equity and bond markets have followed the trend of cryptocurrency markets, lead by Bitcoin, and experienced significant price corrections this year. Inflation, however, has prompted many buyers to actively consider digital assets as a viable hedge, thus experts in the field argue that the interest in supporting these assets is far from a fad.
Dubai is committed to facilitating financial independence in the metaverse and empowering its stakeholders, which includes individuals, innovators, market makers, and providers of services related to digital assets. According to Helal Al Marri, the Director General of the Dubai World Trade Centre Authority, which houses VARA, “VARA needs to ascertain and allow the secure adoption of trade finest practices, foster knowledge-sharing, and advance world interoperability while raising awareness.”
There has been a significant influx of both institutional and individual capital into the market. The cryptocurrency market is expanding at a rate that is unprecedented in the realm of digital assets. According to Chainalysis, total transaction volume increased to $15.8 trillion in 2021, up 567% from 2020 levels. Technavio, a market research company, forecasts that the size of the global NFT market would increase by $147.24 billion, or 35.27 percent CAGR, between 2021 and 2026.
DMCC Government Chairman and CEO Ahmed bin Sulayem said, “Digital assets are playing an increasingly important role in DMCC’s responsibility to drive commerce through Dubai.” The DMCC Crypto Centre provides a comprehensive ecosystem to support the growth and widespread acceptance of cryptographic and blockchain technologies, and is now home to over 400 crypto companies, or more than a third of the total in the UAE. Along with providing access to funding, knowledge, assets, and opportunities, the Crypto Centre will be working closely with the Dubai government to establish the emirate as a leader on the international crypto arena.