Why Blockchain technology is thriving in the UAE
By OXBC member and UAE resident blockchain and economics expert Amna Usman Chaudhry
The United Arab Emirates (UAE) has been a country that has been visionary and proactive in embracing the latest technologies and innovations. After all, it is the first country in the world to have its own Minister of Artificial Intelligence, appointed way back in 2017. UAE’s stance towards blockchain has been similar, in terms of recognising its potential and investing in the right resources to make the theory a very real and practical reality.
The story started in October 2016, when the Crown Prince of Dubai, HH Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, launched the Dubai Blockchain Strategy 2020. The aim was to make Dubai the first powered blockchain city in the world by 2020. This vision was a collaboration assigned between the Smart Dubai Office and the Dubai Future Foundation. The Dubai Blockchain Strategy is essentially built on three pillars:
i) Government Efficiency: To reduce the operational costs of the government and increase efficiency through a paperless digital layer for relevant government applications via the blockchain.
ii) Industry Creation: To provide a pro-blockchain environment for encouraging blockchain businesses in Dubai.
iii) Leadership: Dubai envisions being a trailblazer and global leader in blockchain technology.
Keeping in view the limited time frame to bring this ambitious vision to life, Dubai got started right away. There was a four step process in implementing the Dubai Blockchain Strategy. The first step was to identify the challenges faced by the government and which areas of the government sector were applicable for blockchain implementation. This stage lasted till April 2017. From April-Dec 2017 the second stage was implemented, which involved designing strategically the blockchain use cases identified in stage 1. The third stage involved initial steps in the implementation of blockchain use cases and was the main focus of the year 2018. The fourth stage, starting from 2019 onwards has seen the final steps in the implementation of blockchain technology in relevant identified use cases.
The UAE government also decided to invest in the potential that blockchain offered, and in 2018 launched the Emirates Blockchain Strategy 2021. This was launched by the Vice-President and Prime Minister of UAE, and the Ruler of Dubai, HH Sheikh Mohammed bin Rashid Al Maktoum. The aim of the Emirates Blockchain Strategy 2021 was to implement blockchain in at least fifty percent of applicable government transactions at a federal level by 2021. The Emirates Blockchain Strategy is based on 4 pillars:
i) Happiness of Citizens and Residents: Blockchain offers a lot of benefits such as secure digital flexibility, massive reduction in transaction processing times, reduction in operational costs, transparency to name a few, all which contribute to making the life of UAE citizens and residents easier and happier.
ii) Government Efficiency: Improved efficiency and reduced operational costs at the government level.
iii) Advanced legislation: Transparency and digital security of national documents and transactions leads to better legislation through benefits of blockchain.
iv) International Leadership: UAE wants to be a global leader in blockchain technology.
In a paper published by the World Economic Forum (WEF) earlier this year, titled “Inclusive Deployment of Blockchain: Case Studies and Learnings from the United Arab Emirates” it is mentioned that through the implementation of the Emirates Blockchain Strategy 2021, UAE aims to save:
i) AED 11 Billion ( US$3 billion) in operational costs.
ii) 398 million printed documents per annum.
iii) 77 million work hours annually.
The UAE has to date seen blockchain adoption in over 40 government entities and more than 200 blockchain initiatives around the country. The main challenges in blockchain implementation faced by the government were related to the operational and regulatory side instead of the technical side. These were overcome by holding lots of workshops for educating the stakeholders on blockchain technology, early identification of relevant use cases that would benefit from blockchain, transparent and open communication channels between stakeholders and governmental support. Other considerable mentions that contributed to success include an inclusive approach with all involved stakeholders and additional innovations such as the use of AI along with blockchain.
In 2020 it is pleasantly surprising to see that more than half of all these blockchain projects have already been implemented, and a staggering 80% of most private and government entities are either in the blockchain implementation phase or post implementation phase. Only 20% of entities are in the blockchain pre-implementation phase. This is a massive achievement for such a prominent and promising technology in a short period of time.
Dubai has been crowned the ‘Blockchain Capital’ of the world by CNBC and in 2019 won the Number 1 Smart City on Blockchain Award in Barcelona. The UAE as a whole is being recognised around the world for its various achievements in Blockchain. The UAE took a massive risk on a promising but relatively nascent technology and it is a risk that has definitely paid off in terms of the rewards it has brought to the country.
The Smart Dubai Website: https://www.smartdubai.ae
Dubai Future Foundation: https://www.dubaifuture.gov.ae
Article that mentions UAE cryptovalley: https://asiatimes.com/2020/01/dubai-launching-crypto-valley-in-tax-free-zone/
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