- 09 Jul, 2018
Dubai is a land where nothing is impossible. This time the city is aspiring to become the first blockchain city, where most of the emirate’s businesses will operate using blockchain technology. The city underwent radical shift in embracing bitcoin blockchain technology in the recent times. Since then, Dubai has embraced technology and continues the trend to become world’s first blockchain powered government by 2020. Adoption of distributed ledger technology will save 5.5 billion dirhams annually spent on the documentation alone- a value worth of one Burj Khalifa every year.
Technology centre of the Middle East
Dubai claims to be a major business hub of the middle east owing to its investor friendly taxation and business policies, advanced infrastructure, and secure politico-economic environment. It now aspires to become technology centre of the middle east by implementing blockchain technology at the government level. Blockchain technology can be used to track business information, records of which are verifiable, immutable, and secure. It has potential to speed up transactions, increase transparency and reduce instances of frauds and money laundering.
Government entities realize the need to have secure and shared ledger for greater transparency and accountability of business processes. Majority of emirate’s business are using distributed ledger technology to provide efficient services as well as to attract foreign business investments.
Smart Dubai Blockchain Strategy
His Highness Sheikh Hamdan bin Mohammad bin Rashid Al Maktoum, Crown Prince of Dubai launched the Dubai Blockchain Strategy. It is a collaboration between the Smart Dubai Office and the Dubai Future Foundation to explore and evaluate the latest technology innovations that delivers seamless, safe, efficient, and impactful city experiences.
Smart Dubai is a public-private citywide effort to implement blockchain in government, semi-government, and private organizations. This initiative aims to identify businesses where blockchain can be successfully implemented. It aims to conduct workshops to educate the public and private sectors to initiate blockchain pilot projects collaboratively. Smart Dubai plans to build a shared platform – Blockchain as a Service (BaaS) for government entities to track progress of such blockchain pilot projects. Smart Dubai has recently appointed IBM as its strategic partner and Consensys as software development consultancy and blockchain adviser.
Early technology adopters
Dubai government entity, Department of Economic Development looks after business registration and licensing services in the region. It facilitates setting up businesses, issue commercial license and protect rights of businesses and consumers in the region. The department is in process of shifting all its operations to blockchain.
Emirates NBD, Dubai’s largest bank collaborates with IBM and other business entities to explore blockchain technology applications in trade finance and logistics. The bank experiments to prevent instances of fraud and boost the authenticity and transparency of financial transactions.
Export import businesses through ports and free zones aims to substitute paper based contracts with blockchain based smart contracts, which will reduce cost of documentation, shipping, tracking and supply of goods.
ArabianChain, Arab world’s first public blockchain aims at shifting inter-governmental paperwork on blockchain. It plays an important role in shaping future of blockchain in the middle east. ArabianChain and DubaiCoin (DBIX) will lead the way for cryptocurrency and alternative investment opportunities in this region.
Early technology agreements
ICICI Bank, India’s largest private bank and Emirates NBD partnered to accomplish the first cross border transaction in international trade finance and remittances using blockchain technology. This technology allows banks to have access to single source of information in real time.
The Dubai Financial Services Authority (DFSA) and the Securities and Futures Commission (SFC), Hong Kong entered into agreement for fintech cooperation to encourage startups in MENA and East Asian markets. This fintech accelerator will connect startups with a network of regional and international financial leaders such as the Abu Dhabi Islamic Bank, HSBC, VISA, etc.
Dubai government recently entered into agreement with UK based blockchain startup ObjectTech to create digital passports for entry at Dubai International Airport. It aims to replace manual passport verification and create the world’s first gate-less border. The growing optimism and enthusiasm of Dubai government implementing citywide blockchain payments will soon make it the world’s first blockchain powered city.