UAE Emerging as a Global Hub for Web3 Innovation

The UAE regulators are focused on boosting the local economy by liberalizing the policies to suit the needs of emerging technologies like Web3. The move will create high-quality jobs for the local community, provide skill development opportunities, and add to the region's economic growth through operational expenditures and services to the public. The rapid advancements on the policy front will ensure that the UAE is at the forefront of the web3 revolution and stays ahead of its global counterparts.

Not only that, the UAE market is also emerging as a global hub for Web3 innovation, and the Dubai International Finance Center (DIFC) is acting as a fulcrum to strike a fine balance between regulations and the business aspirations of Web3 entrepreneurs. The growing popularity of the UAE as a Web3 hub clearly shows in the statistics released by DIFC. There has been a 23% rise in the companies enrolling at DIFC this year. Out of these, 660 companies are led by fintech innovation.

The launch of dirham Stablecoins has been one of the most pivotal use cases for digital assets. Traditionally, the stablecoin landscape has been dominated by US dollar-backed stablecoins such as USDT, USDC, and the recently introduced PYUSD. To gauge their popularity, one only needs to look at the numbers, i.e., the total market cap of stablecoins hovers around $124.117 billion (according to DeFi Llama), with USDT leading the way with a commanding 67.13% market share. Given its association with the world's most influential currency, the US Dollar.

Manhar Garegrat, Country Head- India and Global Partnerships at Liminal, a wallet infrastructure and custody solutions platform, said “As crypto regulations keep developing across more regions, one will see a corresponding growth in the popular use cases. The primary utility of stablecoins lies in their ability to facilitate cross-border payments at an exceptionally low cost. Globally, corporations shuffle approximately $23.5 trillion (as per JP Morgan's report) across borders each year. The associated transaction costs for these massive sums tally up to a staggering $120 billion annually. Issues like trapped liquidity, delayed settlements, and the need for foreign currency conversions also plague this process. In this context, stablecoins offer a streamlined solution, enabling seamless transactions with unparalleled security and traceability on a distributed ledger technology. These transactions can easily be facilitated through regulated and compliant custody solutions providers”.

Garegrat added that “the UAE market has already surprised us with its commitment to becoming a leader in the digital assets space, and it is not surprising to see such highly innovative and simple-to-use Web3 products emerging from the nation. The launch of Dirham-backed stablecoin shows that the digital asset market in the region is entering a more mature phase and is ready for the next stage of growth on the back of evolved regulatory frameworks”.

Liminal is keen to build a strong presence in the UAE region and has received in-principle approval from ADGM in Abu Dhabi to provide digital asset custody services to Web3 businesses and institutions. As an active player in the region, Liminal already has a premium clientele and will look to leverage its position further. We are committed to the UAE Web3 growth story and have hired local talent for leadership positions. We will continue to expand our operations across the Middle East.