Dubai is well-positioned to benefit from the growing cryptocurrency market in the Middle East as its regulators lead a push toward acceptance of blockchain-based technologies, according to Bittrex Global’s chief executive officer.
The United Arab Emirates and Dubai are “doing all the right things and they’re going to attract a lot of regional projects,” Stephen Stonberg, CEO of the digital assets exchange, said in an interview. “It’s a great place to set up your token project, or run a cryptocurrency exchange,” he said, helped by the region’s status as a tax haven.
Dubai, the region’s financial hub, has already taken several steps to bolster the use of blockchain within the city in recent months, and Stonberg expects Middle Eastern sovereign wealth funds to also make blockchain allocations.
In May, Dubai Airport Free Zone Authority signed an agreement with the Securities and Commodities Authority to support the regulation, offering and trading of crypto assets within the free zone. The city’s DMCC freezone opened a blockchain-based exchange for sugar trading last year and the Bitcoin Fund listed on the Nasdaq Dubai exchange in June -- the first of its kind to trade in the region.
“I think Dubai is going to do fantastically well,” as it embraces cryptocurrencies, he said, adding that Bittrex expects to have an expanded presence and more clients in the region.
Cryptocurrencies have rallied in recent weeks, with bullish voices, including Tesla Inc. boss Elon Musk and investment manager Cathie Wood, boosting sentiment. Federal Reserve chairman Jerome Powell’s dovish tone about tapering also helped ease fears within the market.
“A lot of the institutional money going into Ethereum and Bitcoin is probably really the driver for the market,” Stonberg said. “It’s not so much as retail froth.”
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