The Binance crypto exchange, the global leading cryptocurrency exchange, recently announced its plan to establish a cryptocurrency hub in Dubai. The crypto exchange signed a Memorandum of Understanding (MOU) with the Dubai World Trade Centre Authority (DWTC). This preliminary agreement illustrates that they will develop a global virtual assets industry hub and use expertise from Binance since it has larger trading volumes and impact internationally.
How is this joint venture beneficial to the country’s growth and the global economy?
This initiative comes at a perfect time as Dubai pushes towards a more ample digital-oriented society. Binance will contribute to Dubai’s commitment to creating a new international Virtual Asset ecosystem that will promote long-term economic growth through digital innovation guided by the Memorandum of Understanding. In addition, it will help in the licensing of a wide array of digital assets, crypto exchanges and gateways, and blockchain offering businesses in Dubai.
Binance aims to contribute to global economic growth, which is Dubai’s target. Binance will contribute to this knowledge-sharing ecosystem by sharing its expertise cooperating with global authorities to assist in the creation of innovative Virtual Asset legislation.
Dubai and France were the Top candidates for the global Binance headquarters. Changpeng Zhao, CEO of Binance, developed a liking for Dubai and went ahead to purchase a home there as an illustration of his relationship with the city. He said the city had the edge over others for the following reasons:
The government is tremendously progressing
Dubai is one of the greatest cities of the authoritarian state, United Arab Emirates; it enjoys the progress of the government that continues to boost the economy of the region, despite being hit hard by the worldwide effects of the pandemic.
The state has solidified its position as a technology innovation hub, and in the process, embracement of the global adoption of digital currencies and blockchain technology. You can also observe this through the recent announcement by the Dubai Financial Services Authority (DFSA), which is the governing body of DIFC (Dubai International Finance Centre). They announced the implementation of regulatory frameworks for investment tokens within the DIFC to create a conducive environment for innovative firms to flourish in the United Arab Emirates.
It is worth noting that to cement their position, the UAE Minister of Economy, Abdulla Bin Touq Al-Marri, announced in April declared that they purpose to use cryptocurrency and asset tokenization as significant contributing factors to boost the country’s economy twice as high as it is within the next decade.
The city is a great business environment
The city is already booming with business due to its central location linking the east and west. Most of its revenue comes from oil and gas exportation, which is attributed to international trading and tourism. Although the crypto industry s digital, having its headquarters in an area with a good business environment where the investors will use it significantly has a great impact on its implication. The greatest contributing factor is the low personal taxation rates.
The city is pro-crypto
The city has increasingly continued to allow the investors to buy, sell, or hold various forms of digital assets such as cryptocurrency with minimal to no taxes. The currency has already gained popularity in the region. A percentage of the population uses it in addition to the vast number of tourists and investors that visit the region.
Moreover, the demand for investment tokens into cryptocurrencies is growing in the region, with a corresponding increase in the number of corporations willing to issue and trade them with the DIFC.
The success of this agreement will speed up the growing of the economy.