The United Arab Emirates (UAE) is moving mountains to position itself as a leader in digital assets such as cryptocurrencies.
Several recent developments are expected to reshape the local economy and pique the interest of other lucrative sectors. Read on as we analyse the latest state of play.
AE Coin Set to Take Centre Stage
The Central Bank of the UAE (CBUAE) recently gave AED Stablecoin LLC provisional approval to launch AE Coin – the Emirates’ first stablecoin pegged to the UAE Dirham (AED).
Stablecoins have become increasingly popular over the years, and are now being recognised as vital instruments for bridging the gap between traditional finance and digital assets.
The AE Coin is being touted as a fully-backed and regularly audited currency that combines the stability of a fiat currency with the speed and efficiency of blockchain technology.
AE Coin will be used for day-to-day payments and transactions, allowing organisations to conduct business seamlessly in the decentralised finance (DeFi) realm.
When implemented, the UAE will only be second to Israel in digital asset activity on DeFi protocols as it looks to become the foremost player in the sector.
Integrating AED Coins into the UAE’s financial ecosystem is undoubtedly good news for gambling operators. The coin will simplify payment processes, enable faster transactions and lower fees, making it a viable alternative to what traditional financial institutions offer.
Many of the reputable gaming platforms listed on comparison website casino/ae/en/ have previously demonstrated willingness to embrace innovative payment options.
Some operators have already dabbled with digital assets by allowing players to fund their online gaming activities with cryptocurrencies such as Bitcoin. Many casino players feel more secure conducting transactions with the extra layer of security that cryptocurrencies offer them.
Crypto runs on blockchain technology, which holds an immutable ledger that fortifies the security of transactions. Participants in blockchain networks control their digital assets on the blockchain with a private key — a cryptographically secured method of authentication and access.
Bahrain’s BTC-Linked Product is a Sign the UAE is Not Alone
Not to be outdone by their Middle Eastern counterparts, Bahrain has launched a product from the vaults of the National Bank of Bahrain (NBB).
They have promised that the product offers total protection against the notorious volatility of Bitcoin to make it a more attractive asset for potential investors.
The specifics of how the product works are still being ironed out, but it will likely involve structured financial instruments like options trading.
The product could be a game-changer for gambling operators looking to utilise crypto. A BTC-related product with downside protection could open the door for more innovative gaming models that attract a wider audience, even those hesitant about cryptocurrencies because of their volatility.
Bahrain’s move signals that other Middle East nations are eager not to be left behind. Several countries are also innovating in the cryptocurrency sector and ready to compete with the UAE.
Saudi Arabia is already a front-runner in the crypto sector. The Kingdom is an ideal breeding ground for new financial technologies, and the race to innovate is on.
Gambling Operators are Poised to Capitalise
These developments create an inviting landscape for online gambling operators, particularly those which already have a foothold in the Middle East.
Numerous sites welcome Arab players, but they have traditionally been licensed by organisations based in other jurisdictions.
However, the UAE is in the midst of changing how the gambling sector operates in its borders having established its own regulatory authority to oversee things.
The recent developments with stablecoins further demonstrate how the UAE is eager to build a favourable environment for industries which have previously been frowned upon in the Middle East.
The fact that the UAE has established clear regulations sets it apart from countries where capital gains tax on crypto can discourage investors from pouring funds into the digital asset market.
The emergence of products that protect against market volatility could further incentivise gambling operators to adopt cryptocurrencies in their transactions.
