Cryptocurrencies are becoming increasingly popular in Dubai. It is partly because the Dubai government supports this new technology and makes it a global centre for blockchain innovation.
Bitcoin, the first and most famous cryptocurrency, was created in 2009. Cryptocurrencies are decentralized, not subject to government or financial institution control.
Many people buy cryptocurrencies as an investment, hoping that their value will increase over time. They also use crypto to purchase goods and services online. You can use them globally as long as you have an internet connection.
The UAE, of which Dubai is part, has announced plans to become the world’s first “blockchain-based government.” It believes blockchain technology can “transparently account for transactions,” enabling it to collect taxes and ensure officials are not corrupt.
As the world’s top oil exporter, Dubai hopes using blockchain will save $1.5 billion annually on document processing alone.
Proximity to other countries in the Gulf region is why Dubai is leading the way to cryptocurrency trading.
Most Bitcoin users are located in Europe and North America; however, there is also a large market for this currency in South Asia (including Pakistan, India and Bangladesh).
Although Bitcoin is the most popular cryptocurrency, over 1,000 other types are available. Some of these include Ethereum, Litecoin and Ripple. These can be traded at Dubai’s blockchain platforms.
The first company to set up a platform in the UAE was BitOasis, which opened its doors in 2015. It works with local banks to enable people to buy and sell cryptocurrencies using AED (the dirham).
Still, it cannot currently handle trading in US dollars or other foreign currencies.
BitOasis does not allow for direct purchase of cryptocurrencies using credit cards; however, it works with United Arab Bank (UAB) and Emirates Islamic, both based in Dubai, who offer such services.
Residents can also directly transfer funds into their BitOasis digital wallet through wire transfer.
UAB is the first bank to offer direct purchase of Bitcoins using credit cards. The bank has partnered with US-based cryptocurrency provider SimplexCC, enabling users to complete its website or mobile app transactions.
Similarly, Emirates NBD, also based in Dubai, offers instant buying of cryptocurrencies at any of its branches across the country. However, where possible, it will encourage customers to use debit cards instead of credit cards for ease of refund should the value drop shortly after purchase.
The next most popular platform in Dubai is BitOlymco. Residents can buy and sell Litecoins using wire transfers or AED through local banks such as Noor Bank and EmiratesIslamic.
There are also several trading floors where people can purchase cryptocurrencies directly from brokers in CFDs (Contract for Difference). These include AvaTrade, which sells more than 300 types of cryptocurrency, and eToro, which offers manual and copy trading options.
Other platforms allow users to trade cryptocurrencies over-the-counter (OTC) using local cash. Kraken, an OTC market for Bitcoin-based in San Francisco, opened its doors to UAE residents in 2016.
Although it does not yet support AED transactions, its presence increased awareness of digital currencies when banks began to offer them as investment tools.
LocalBitcoins is another open marketplace that enables peer-to-peer crypto deals throughout the UAE. The advantage of this site is that it supports a broader range of cryptocurrencies than most exchanges and brokers; however, it can be risky as there is no regulation governing users or their activities.
- Bitcoin was the first cryptocurrency and remained the most popular. It is a digital asset and a payment system invented by Satoshi Nakamoto in 2009.
- Transactions are verified by network nodes through cryptography and recorded in a dispersed public ledger called a blockchain.
- Bitcoins are created as a reward for a process known as mining. You can exchange them for other currencies, products, and services.
- As of February 2018, over 17 million bitcoins were in circulation with a total market value of $130 billion.
- Bitcoin has experienced some volatility in its price over the years, reaching a high of $19,535.50 on December 16, 2017, before dropping again to around $8,000 by mid-February 2018.
- Its success has inspired other cryptocurrencies to be created; these are collectively known as altcoins and include Litecoin, Ethereum and Ripple.
- On April 1 2018, Dubai’s biggest gold trader RedChain FZE announced they would start accepting Bitcoin for payments. This is significant because this is not just another crypto scam or way to boost their PR, but it goes beyond that because this company regularly does.
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