According to the CEO of Bittrex Global, Dubai is well positioned to take advantage of the growing cryptocurrency market in the Middle East as regulators lead the way towards adoption of blockchain-based technologies.
The United Arab Emirates and Dubai are “doing the right things and they will attract a lot of regional projects,” said Stephen Stonberg, CEO of the digital asset exchange, in an interview. “It’s a great place to set up your token project or run a cryptocurrency exchange,” he said, aided by the region’s status as a tax haven.
Dubai, the financial hub of the region, has already taken several steps in recent months to bolster blockchain use in the city, and Stonberg expects Middle Eastern sovereign wealth funds to make blockchain allocations as well.
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 a bigger presence and more customers 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. The soft tone from Federal Reserve Chairman Jerome Powell about tapering also helped allay fears in the market.
“A lot of the institutional money going into Ethereum and Bitcoin is probably really driving the market,” Stonberg said. “It’s not so much retail foam.”
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