Learn More About Blockchain Revolution in UAE

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Saketh, TLR

Published on November 1, 2023, 09:03:28

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Learn More About Blockchain Revolution in UAE

Blockchain technology is revolutionising several industries throughout the world, including banking and supply chain management, by providing creative solutions. Blockchain technology has been embraced by the government of the United Arab Emirates (UAE) proactively. 

 Regulatory Structure

1. National Blockchain Strategy: In 2018, the UAE government unveiled its National Blockchain Strategy to establish the nation as a leader in the use of blockchain technology. The three main pillars of the approach are industry creation, international leadership, and government efficiency.

2. Authorities in Charge: In the UAE, the Securities and Commodities Authority (SCA), the Dubai International Financial Centre (DIFC) Authority, and the Abu Dhabi Global Market (ADGM) Financial Services Regulatory Authority are the main authorities in charge of overseeing blockchain technology regulations. Depending on the industry, these organizations are essential for monitoring and controlling blockchain-related activity.

Utilization Instance

1. Cryptocurrencies: Although they are not officially accepted as legal cash in the UAE, users are nevertheless allowed to utilize cryptocurrencies such as Bitcoin. Since there isn't yet a formal regulatory framework in place, it's imperative to exercise caution while engaging in cryptocurrency-related activities.

2. Smart Contracts: In the UAE, smart contracts-self-executing agreements with the terms of the contract encoded straight into code have become more popular. They give businesses a safe and effective means of carrying out contracts since they are legally recognized and enforced.

3. Supply Chain Management: Supply chains are becoming more transparent and traceable thanks to the application of blockchain technology. This technology is especially significant in the UAE because of its strategic location as a global commerce hub, and there are several projects underway to apply blockchain in this domain.

4. Real estate: To decrease fraud risk and improve procedures, the Dubai Land Department has been actively investigating the use of blockchain in real estate transactions.

Government Assistance

Blockchain spurs economic growth and innovation, it has the active backing of the UAE government. Here are a few initiatives by the UAE authority to enhance the blockchain revolution:

• The goal of the 2016-launched Dubai Blockchain Strategy is to use blockchain technology to establish a paperless government by 2021. Its goals include decreasing fraud, improving security, and revolutionizing government services.

• Trade financing activities might be made easier for firms by using a blockchain-based platform, which is being investigated by the central bank of the United Arab Emirates.

• Blockchain firms and Hubs: Through specialized incubators and accelerators, the UAE has promoted the expansion of blockchain firms. Particularly in Dubai, blockchain innovation has taken off.

Despite the UAE's significant support for blockchain, there are still issues to take into account, like:

1. Regulatory Clarity: The regulatory environment is still developing, and more information is required in many areas, particularly with cryptocurrencies and initial coin offerings (ICOs).

2. Security and Privacy: Blockchain is not impervious to security and privacy issues, just like any other digital technology. It is imperative to guarantee the security and adherence to data protection rules of blockchain systems.

3. Awareness: To assist people and organizations in comprehending blockchain technology's potential and best practices, ongoing education and awareness campaigns are necessary for its widespread adoption.

The UAE's attitude to blockchain technology is characterised by its embrace of digital transformation and dedication to innovation. It is well-positioned to carry on with its blockchain revolution, reaffirming its position as a progressive worldwide centre for blockchain adoption and development with a well-defined plan and an accommodating administration. Stakeholders must be aware of and abide by the legal implications of blockchain technology in the UAE as the regulatory landscape changes.

For any enquiries or information, contact ask@tlr.ae or call us on +971 43493428Follow The Law Reporters on WhatsApp Channels.

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