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Year-to-date, Bitcoin [original] has advanced by just over percent, which is an impressive track record. Other exchange houses in the GCC are viewing Bitcoin as an important development. UAE Exchange invested in two blockchain-based companies, Loyyal and Bankchain, in the first half of and is in talks with a third — a firm statement of its confidence in the nascent technology.
We are a great believer in the technology, and Bitcoin is a great way of transferring currency at a reduced cost. Blockchain, meanwhile, provides a secure platform enabling customers to protect their identity without supplying bank details and other personal information that could be stolen.
For the GCC, the cost reductions may not be so great as for other regions, given that its main remittance destination corridors of South Asia, Southeast Asia and North Africa are already well served and competitive, says Manghat. He claims UAE Exchange customers in these regions can send and receive money within two minutes. When you consider that the average international transfer fee is nearly 20 percent between some countries, this is significant. By cutting out the middle men, you can significantly reduce the cost of transmitting money across the globe.
Ola Doudin, CEO and co-founder of Dubai-based start-up BitOasis, which facilitates Bitcoin transactions across the Middle East and North Africa MENA , claims typical fees payable on Bitcoin transactions are around one to three percent, compared to seven percent for some exchange houses, depending on the destination.
On the flipside, it is an unregulated industry and that brings risks and challenges. Banerjee notes that the latest package of regulations from the UAE Central Bank this year did not cover Bitcoin and associated industries. Once the proper framework is in place, it should speed up the adoption of the currency.
Lack of awareness and opaque marketing are other barriers to greater take-up of Bitcoin in the Gulf, he says. Education is always the go-to solution when you are trying to encourage the adoption of a new product or platform. Consumers need to trust Bitcoin as a currency in the same way that they trust fiat currencies before the rate of adoption increases. However, with global remittances declining amid economic slowdown, the forex industry is under pressure to keep abreast of any new technologies that may help it to cut costs and provide a smoother service.
Lower oil prices and fiscal tightening in the GCC were the main factors behind a 6. Pakistan saw only modest growth of 2. It seems he could do worse than look at Bitcoin. The industry is certainly growing, with new global players entering the market almost every week. Some experts predict it could even gain global momentum as a non-correlated asset class. Bitcoin advocate and tech entrepreneur Niko Younts tells Arabian Business: There is no confusing paperwork, high fees, day- or week-long delays, chance of account freezes or rejection, or any arbitrary limits.
Private Investment Undertakings are new breed of investment funds with a high degree of flexibility in structuring, aimed to facilitate private investments, the like of a family held investment, single investor or a single investment type. Due to the investment risk characteristics it may exhibit, such type of scheme can only be initiated to High Net-Worth Individuals and Institutional investors.
One of the biggest obstacles in the growth of asset management industry is the regulations relating to foreign ownership. Typically, in the GCC, 51 percent of ownership needs to be held by a national who is paid a sponsorship fee for being a silent partner, while the foreign investor bears the entire risk.
However, hybrid models of ownership have emerged for instance the establishment of free zones. You are commenting using your WordPress. You are commenting using your Twitter account.
You are commenting using your Facebook account. Notify me of new comments via email. Some of the incentives offered to foreign businesses include concessions, a zero per cent tax rate and the ability to own a per cent subsidiary foreign ownership restrictions apply outside the free zones The Law Reviews The Dubai Financial Services Authority DFSA is the independent regulator of all financial and ancillary services conducted through the DIFC, including investment management.
It has also created a new class of DIFC-domiciled funds, aimed at the richest and most risk-tolerant investors, which face less stringent regulation than existing funds Arabian Business Similarly, Qatar has established its own regulatory framework under the Qatar Financial Centre QFC based on international law and best practices.
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