A glimpse into the UAE crypto and Blockchain market post Covid

For anyone interested in learning more about how the UAE is moving forward in Blockchain and how the GCC is viewing the crypto markets, there is no one better and more humble person to talk to then Mr. Saeed Hareb Al Darmaki, the Co-Founder Managing Director of Alphabit Fund and the Chairman of newly established eGovern.

Saeed has been a vanguard when it comes to blockchain and crypto in the UAE. He was one of the first to actually invest in crypto currencies, as well as various blockchain startups. He currently advises blockchain startups and traditional businesses on how to utilize blockchain technology as well as manages crypto and blockchain asset portfolios. Al Darmaki is currently the blockchain advisor for Lead Ventures in the UAE.

UNLOCK as such took the opportunity to ask Al Darmaki about several topics related to crypto markets, crypto regulation in the region, Central Bank Digital Currencies and his newly established eGovern entity.

According to Al Darmaki, while Covid-19 has had an effect on markets it has shown that its effect is the same both on traditional as well as crypto assets. So when Covid-19 first hit,  crypto assets including Bitcoin were affected and markets crashed just like other counterparts that tumbled following suite with other markets, but now he sees that they have recovered much like other markets.

As for his take on investing in blockchain and crypto related startups, Al Darmaki states, “Our strategy at Alphabit Fund hasn’t changed, we are still looking for long term solutions to problems of today, even though risk levels are high and we are more cautious we are always on the lookout for new opportunities. Covid-19 has actually brought in new opportunities and accelerated the need for blockchain solution so I am positive and believe blockchain will be at the forefront especially when it comes to financial solutions, banking, supply chain and all the uses cases that have already proven valid.”

In the end he explains, “You should always be looking for opportunities especially when prices go down because fortune favors the brave.”

When we asked about the current situation with regards to crypto licensing of exchanges in the UAE and the fact that not many have launched despite the number of preliminary licenses granted by ADGM ( Abu Dhabi Global Market) in the past year, Al Darmaki explained that the ultimate aim is to launch well regulated exchanges rather than to launch quickly.

He states, “The reason why we haven’t seen the official launch of virtual asset exchanges so far in the UAE is mostly because of the stringent requirements set by FSRA the regulator at ADGM. There is an exhaustive list of conditions that need to be met. In addition there are liquidity and funding issues for some of these startups that has been exacerbated by Covid-19 so I think it’s a combination of these two things. In the end when it comes to regulation and protection of customers and investors there is no harm in being cautious and getting it right the first time.

UNLOCK also asked Al Darmaki about the upcoming crypto legislation that is being formulated by the Securities and Commodities Authority in the UAE and the timeline for its launch. As Darkmaki explains, “they are still in the midst of studying the framework to come up with the best possible framework and I think we should see something either by the end of this year or early next year. It will be a comprehensive framework.”

In 2019 the UAE Central Bank and Saudi Arabian Monetary Authority announced that they were working on a joint Central Bank Digital Currency called ABER. To date there have been no further announcements or updates on the project. UNLOCK asked Al Darkmaki on this topic as well as central Bank digital currencies in general.

He states, “First when it comes to CBDCs there is still a long way to go and I believe this is something that needs to be studied thoroughly by central banks that need to be comfortable with the regulations and controls in place as well as with the blockchain technology they are using. These need to be tested thoroughly and as such will take a number of years before being fully implemented.”

As such Al Darmaki believes that ABER Digital currency, will not being coming out any time soon. He adds, “There have been talks about piloting ABER yet it will take several years before something concrete arises.”

He does believe however that if we are to see a CBDC it will most probably come out of China first as they have been progressively working on this as well as blockchain over the past years and already have similar digital currencies being used on Wechat.

As for Al Darmaki’s latest endeavors, UNLOCK learned more about eGovern which is a UAE based company that works with governments and corporations to assist them in identifying, designing and implementing blockchain solutions to meet their pressing challenges and digital transformation objectives.

As Al Darmaki explains, “My partners and I are leveraging our longstanding experience in Blockchain and our network of solution providers to offer solutions to governmental and enterprise customers not only in the UAE and MENA region but also globally.”

He adds, “We are able to match the right Blockchain service provider to  client’s business objectives. These Blockchain entities are not the big ones that already have well established in-house solutions and business development but the up and coming providers who nevertheless have considerable technological expertise and are among top 100 solution providers in terms of market capitalization.”

eGovern is already in talks with several governmental entities in the UAE, Africa and even Caribbean to offer them solid blockchain solutions that compete with the big blockchain providers present today.

Al Darmaki believes strongly that the future will be bright. According to him the UAE is proactively promoting startups and blockchain companies as well as supporting the needed crypto regulations and will witness increased progress over the upcoming months and years. As he concludes, “ the UAE continues to press on to becoming a Blockchain hub in MENA and eventually a global hub and I am excited about how things are developing and continue to do my part to help. A lot of good things are happening and I am confident that the next years will be exciting ones.”