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Tax-friendly UAE beckons blockchain businesses 

The UAE is proving attractive to blockchain companies Unsplash/Austin Distel
The UAE is proving attractive to blockchain companies
  • Ranked third globally as crypto centre
  • 1,800 blockchain businesses
  • $100m new foundation in Abu Dhabi

The UAE is becoming a preferred destination for blockchain technology companies, ranking third globally as a crypto centre, according to a survey.

Immigration consultancy Henley & Partners used six criteria to arrive at a global ranking and placed Singapore first because of its government’s close cooperation with banks, businesses and the public in developing its crypto sector. 

Henley rated Switzerland second because of its crypto infrastructure, strong legal framework and reputation for privacy and security.

But the UAE has become more popular because of favourable tax policies and a high level of economic stability, the survey found. The country has the most blockchain companies – 1,800 – while Switzerland and Singapore host 1,135 and 819 active businesses, respectively. 

Nicola Buonanno, VP at Chainalysis, a US-based blockchain analysis business, said that above-average levels of GDP per capita mean that a few countries in the Middle East are attractive to blockchain operators. He pointed in particular to the UAE, Saudi Arabia and Qatar.

“The larger proportion of disposable income means a greater need for financial services and a greater appetite for investment,” Buonanno told AGBI. “The region therefore represents a significant opportunity for crypto businesses.”

Bashir Kazour, managing director at Taurus, a digital asset infrastructure provider headquartered in Switzerland, said that blockchain providers are also attracted to the UAE because it has clarified its regulatory framework. 

Bashir Kazour TaurusSupplied
Taurus managing director Bashir Kazour says the UAE’s clarified regulations are welcome

The establishment of the Virtual Assets Regulatory Authority in Dubai and other initiatives such as Abu Dhabi Global Market and Ras al-Khaimah’s Digital Assets Oasis lend credibility to a sector that has been marred by the high-profile collapse of operator like FTX and problems at Binance, an exchange.

Taurus, which is backed by Deutsche Bank, recently expanded its operations in the UAE. It issues and manages cryptocurrencies, tokenised assets and digital currencies.

Tokenising assets is a process in which ownership rights in land or buildings are represented as digital tokens and stored on a blockchain. 

Taurus provides a unified platform for users to tokenise digital assets and integrate it into its custody platform where it can be stored securely.

The UAE’s appeal was underscored earlier this week when it attracted a $100-million foundation from global technology network Iota.

Iota wants to sell its distributed ledger technology, a form of crypto similar to blockchain, across the Middle East. The Iota Ecosystem DLT Foundation will be based in Abu Dhabi.

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