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Though the central bank forbids the banking involvement in crypto, it has one of the largest number of crypto enthusiasts and investors.
Topic: Cryptocurrencies in the Middle East: from Approval to Haram (Read 168 times)
The issue of cryptocurrencies in the Middle East is as multifaceted as the region itself. Commonly known for its oil production and quickly developing global cities, the area displays immense economic, political, and cultural diversity. It is rich and poor, progressive and conservative, stable and turbulent at the same time. We, assetrush.com, have decided to take a closer look at the crypto climate in some major Middle Eastern countries in order to get a better idea of the current state of play in the region.
The United Arab Emirates
First of all, it’s necessary to point out that when we talk about cryptocurrencies in the United Arab Emirates, we mostly talk about Dubai and Abu Dhabi, two main cities which seem to have fully embraced blockchain. Such enthusiasm can be easily explained: His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, the Crown Prince of Dubai and the Chairman of Dubai Future Foundation, has been very supportive of the technology and set a goal of securing all government documents on blockchain by 2020. Blockchain is also being welcomed in other aspects of life in the UAE. For instance, recently, Maqta Gateway, a subsidiary of Abu Dhabi Ports, unveiled its plans to develop a blockchain platform called Silsal aimed at boosting the efficiency of the shipping and logistics industries. As for digital money and ICOs, since February, 2018 Abu Dhabi Global Market (ADGM) has been considering implementing a regulatory regime; on April 30, 2018 such a framework was finally proposed. It complements the Guidance on Initial Coin Offerings and Virtual Currencies issued in October, 2017; addresses “the full range of risks associated with crypto asset activities”; and seeks to stimulate the development of a “stable and sustainable financial services sector” in the country.
Iran
At first glance the crypto climate in Iran looks significantly colder than in the UAE: at the end of April the Central Bank banned all domestic financial institutions from working with cryptocurrencies. Despite this, the country has recently developed its own digital money, which was announced by Mohammad-Javad Azari Jahromi, Iran’s Minister of Information and Communications Technology. It’s believed that in light of the renewed US sanctions against Iran and expanded sanctions against Russia, the two affected countries might start to use cryptocurrencies to mitigate the harmful effect of the embargo and to gain more independence from the SWIFT system.
Egypt
Blockchain hasn’t been particularly robust in Egypt, although not so long ago the first blockchain-focused incubator was launched there. While the technology itself is slowly carving out its niche, cryptocurrencies and ICOs have been facing insuperable obstacles. Firstly, the Central Bank of Egypt seems to have no intention of passing a law that would allow trading of digital money. Secondly, Shawki Allam, the religious leader of the country, said cryptocurrencies are forbidden under Islamic law and thus set them equal to haram. So, a rapid thaw in the crypto climate in Egypt is obviously not forthcoming.
Turkey
There hasn’t been a lot going on in terms of blockchain and crypto in Turkey. Back in February the government of the country was said to be considering creating a state-backed digital currency called Turkcoin, but there haven’t been any updates since. The country is not at the cutting edge of the new technology, but at least it is not openly hostile to it.
Final Thoughts
The Middle East is an extremely diverse region, which means that trading cryptocurrencies or launching your own ICO there requires profound knowledge not only of its crypto market, but also its cultural peculiarities. And although acceptance is spreading more slowly there than in the United States and Europe, all in all the Middle East is gradually embracing blockchain and cryptocurrencies. The United Arab Emirates is definitely the leader as the process of adapting and implementing both the new technology and digital money there is supported at the highest level. In addition, the country is well off and has plenty of investors.
The United Arab Emirates
First of all, it’s necessary to point out that when we talk about cryptocurrencies in the United Arab Emirates, we mostly talk about Dubai and Abu Dhabi, two main cities which seem to have fully embraced blockchain. Such enthusiasm can be easily explained: His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, the Crown Prince of Dubai and the Chairman of Dubai Future Foundation, has been very supportive of the technology and set a goal of securing all government documents on blockchain by 2020. Blockchain is also being welcomed in other aspects of life in the UAE. For instance, recently, Maqta Gateway, a subsidiary of Abu Dhabi Ports, unveiled its plans to develop a blockchain platform called Silsal aimed at boosting the efficiency of the shipping and logistics industries. As for digital money and ICOs, since February, 2018 Abu Dhabi Global Market (ADGM) has been considering implementing a regulatory regime; on April 30, 2018 such a framework was finally proposed. It complements the Guidance on Initial Coin Offerings and Virtual Currencies issued in October, 2017; addresses “the full range of risks associated with crypto asset activities”; and seeks to stimulate the development of a “stable and sustainable financial services sector” in the country.
Iran
At first glance the crypto climate in Iran looks significantly colder than in the UAE: at the end of April the Central Bank banned all domestic financial institutions from working with cryptocurrencies. Despite this, the country has recently developed its own digital money, which was announced by Mohammad-Javad Azari Jahromi, Iran’s Minister of Information and Communications Technology. It’s believed that in light of the renewed US sanctions against Iran and expanded sanctions against Russia, the two affected countries might start to use cryptocurrencies to mitigate the harmful effect of the embargo and to gain more independence from the SWIFT system.
Egypt
Blockchain hasn’t been particularly robust in Egypt, although not so long ago the first blockchain-focused incubator was launched there. While the technology itself is slowly carving out its niche, cryptocurrencies and ICOs have been facing insuperable obstacles. Firstly, the Central Bank of Egypt seems to have no intention of passing a law that would allow trading of digital money. Secondly, Shawki Allam, the religious leader of the country, said cryptocurrencies are forbidden under Islamic law and thus set them equal to haram. So, a rapid thaw in the crypto climate in Egypt is obviously not forthcoming.
Turkey
There hasn’t been a lot going on in terms of blockchain and crypto in Turkey. Back in February the government of the country was said to be considering creating a state-backed digital currency called Turkcoin, but there haven’t been any updates since. The country is not at the cutting edge of the new technology, but at least it is not openly hostile to it.
Final Thoughts
The Middle East is an extremely diverse region, which means that trading cryptocurrencies or launching your own ICO there requires profound knowledge not only of its crypto market, but also its cultural peculiarities. And although acceptance is spreading more slowly there than in the United States and Europe, all in all the Middle East is gradually embracing blockchain and cryptocurrencies. The United Arab Emirates is definitely the leader as the process of adapting and implementing both the new technology and digital money there is supported at the highest level. In addition, the country is well off and has plenty of investors.
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