Dubai has been transitioning from these traditional sectors towards international financial and technological services. This has transformed the city into a global hub for I.T. and telecommunication industries.
3 points for the rise of bitcoin in Dubai:
1. Currency Wars- Introduction to bitcoin in Dubai
As early as 2011, it has been documented that the United States was a significant target for a planned currency war. Brazil’s Finance Minister Guido Mantega coined the term in 2010 to describe a race to the bottom of devaluing currencies between trading countries.
In an interview with Bloomberg, he stated that “countries are seeking a ‘desperate’ escape from the grasp of the global financial crisis.” In August 2010, Jens Weidmann, president of Germany’s Bundesbank, said that “currencies have a life of their own” and “the national interest always has to come after the European interest.”
For example, this may occur when multiple countries try to impact exchange rates by lowering their currency’s value. In other words, a currency war is where countries compete against each other to make the export products of each country relatively cheaper, thus increasing demand for that product and thus increasing jobs in that industry. You can also earn a good profit from Bitcoin Prime Auto-App.
The primary strategy within a currency war is through purchasing lesser valued reserves currencies to achieve an exchange-rate devaluation compared to other countries that may or may not be engaging in the same strategy. The “war” comes about when one (or some) central banks continuously pursue this devaluation policy while others do not.
2. Rise of bitcoin in Dubai
The digital currency bitcoin has had more than its fair share of ups and downs since its inception in 2009. As reported by CoinDesk, bitcoin had hit a high of $1,150 per unit back in 2013 but has since then plummeted to less than half of that figure.
Even so, the dropping prices have not halted investors from continuing their bets on bitcoin and other cryptocurrencies. And this is where Dubai-based Emirates Investment Bank (EIB) sees an opportunity.
The financial firm has partnered with Bitcoin Wallet to launch the UAE’s first bitcoin exchange ETBForum, which will allow investors better access to trade the digital currency. EIB CEO Rishaad Salamat says that this decision aligns with his company’s goal of keeping up with technological changes.
“We recognized the potential of Blockchain and realized how this un-tapped market had a promising future,” he said at the launch. “So, we decided to introduce Bitcoin in Abu Dhabi, and we’re positive it will add value to our clients and community at large.” It is also expected that the forum’s trading platform will eventually support other cryptocurrencies in the future.
3. Bitcoin/Cryptocurrency and Blockchain (DLT) Virtual Currency
In some cases, a virtual currency can be used as an exchange medium for real currencies such as the U.S. dollar or euro. In addition, some have seen virtual currencies as a low-cost alternative to bank transaction fees for individuals and small businesses and an easier way to make international payments for governments and corporations.
Virtual currencies have also become a matter of contention among financial regulators in many countries in recent years. These authorities are concerned about the volatility of virtual currency prices, which can create problems when traditional contract law is applied to businesses that deal in virtual currencies. As a result, regulators and central banks, tax authorities, and legal regulators across the globe came together for an international round table conference on regulating and supervising such activities without hampering innovation.
According to sources, UAE Central Bank has issued a warning on its website about trading in digital currencies, which it says are not backed by any official authority. Moreover, there is no specific legal framework that covers their use.
“For such products, businesses and individuals should approach authorized financial institutions that take care of these activities,” it said. “These institutions are listed on the website of UAE Central Bank.”
The statement in December 2013 by Obaid Saif al-Aboodi, Assistant Director of the Financial Intelligence Section at the Abu Dhabi Police.
The warning issued by UAE authorities is regarded as a response to Dubai’s recent BitCoin rise. The Bitcoin above Wallet was forced to shut down all its operations in the UAE, including trading, due to the country’s unclear regulation status for bitcoin. The UAE Central Bank has made no clear statement on its stance towards digital currencies.