The Dubai Multi Commodities Centre (DMCC), the emirate's free zone, announced its intent on establishing the world's largest Crypto Valley ecosystem. DMCC struck up a partnership with the Switzerland-based cryptographic and blockchain technologies investment company CV VC in order to carry out this project.
DMCC and CV VC's agreement to launch the ecosystem from the center's main hub in Jumeirah Lake Towers was sealed and disclosed during last week's World Economic Forum in Davos, Switzerland.
"DMCC is delighted to sign this agreement with CV VC, and launch the Crypto Valley in Dubai, at the very heart of Dubai's leading business district," said DMCC Executive Chairman and Chief Executive Ahmed Bin Sulayem.
As with the Swiss Crypto Valley, Dubai's will be supporting startups on their path to blockchain glory, offering technical and business mentorship and education to individuals looking to form careers in the blockchain industry. It will also provide innovation, co-working, and funding facilities and services to clients.
Crypto Valley's launch in DMCC is meant to amplify "the city's dynamic business environment." It is also a means of sustaining the UAE government's Emirates Blockchain Strategy 2021, which aims to "attract the innovators, entrepreneurs and pioneers that will shape the future economy."
According to International Data Corporation's (IDC) Software and Cloud Program Manager Manish Ranjan, one of the most advanced adoptions of blockchain across the Middle East are in the UAE. Out of 800 of the region's tech influencers and decision-makers, most were either employed at companies and organizations that had already implemented the use of blockchain or were planning to do so by 2021.
Founder of CV VC and CV Labs, Ralf Glabischnig, expressed the thrill at moving Crypto Valley into the MENA region with such a strong local partner such as DMCC.
"In our opinion the competence from Crypto Valley based companies will support the ambitious goals and strategy to use blockchain in Dubai and beyond," Glabischnig explained.
In October 2017, Dubai revealed information regarding having its own blockchain-based cryptocurrency, EmCash. A year later, the emirate was set to launch the cryptocurrency in an emPay wallet, allowing users to make contactless payments from day-to-day purchases to governmental bills and fees.
DMCC's location in a "free zone" gives businesses the benefit of not having to pay any taxes. This means that the organizations running from DMCC or any "free zone" in Dubai keep 100 percent of their profits or any money they make. Therefore, if a crypto or blockchain company were to set up camp at DMCC, they would also be exempt from any governmental taxes.
DMCC's 2018 Future of Trade report found that the use of blockchain could reduce up to 20 percent of physical paper usage in relation to global trade. The costs of using paper are currently calculated at approximately 6.6 trillion dirhams ($1.8 trillion).
A spending guide published by IDC in 2019 reveals that blockchain solutions spending is predicted to reach $15.9 billion by 2023 globally. Blockchain spending that year was forecast to increase by 80 percent from 2018, reaching a total of $2.7 billion.
When it comes to the Middle East and Africa region specifically, blockchain spending has grown at a combined rate of 70 percent since 2016. It is predicted to reach a total of $307 million by the year 2021.
"The growth and adoption of blockchain by enterprises is accelerating as the benefits of using blockchain to increase efficiency and improve processes are understood," says research director at Worldwide Blockchain Strategies James Wester.