There’s a New Crypto Center in the Middle East, and It’s Not Dubai
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Just before the new year, the world’s leading crypto exchange Binance targeted Dubai as the next location for an advisory body. Local Bitcoin and crypto millionaires were delighted about the move. Dubai was poised to become the Middle East leader in crypto transactions, often touted as the Bitcoin hub for the region.
Binance’s CEO Changpeng Zhao even tweeted a pic of him wearing a traditional Emirati robe (kandura), captioning it with an Emirati flag. A couple of months later, there’s been no movement on that front. Binance is not registered for legal use in Dubai, but it just got a license in Bahrain.
A New Crypto Power in the Middle East
The small Gulf state has banking regulations for crypto in place which is why Binance has followed other crypto companies to set up shop. That’s unlike Dubai where such regulations are still not live. Bahrain’s Central Bank accepts cryptocurrencies as legit payment methods, allowing customers to deposit and withdraw money easily via established banks.
This is in stark contrast with the approach most countries have on cryptos. Rarely any central bank recognized cryptocurrencies as legal tender. For example, Dubai’s Central Bank doesn’t recognize Bitcoin as means of payment, nor does the central bank of China or India for that matter. If banking in Dubai is sorted when it comes to cryptos, it would become the number one destination for crypto enthusiasts in Middle East, and probably the world.
CBB’s governor Rasheed M Al-Maraj is proud that the bank is one of Middle East’s early crypto adopters. While other countries around the world remain skeptical of crypto transactions, Bahrain has decided to go with the flow. Bitcoin is quite popular in the small Gulf country, but unlike China, India, or the USA, it has decided to embrace crypto instead of outlaw it.
Bahrain’s oil GDP leads the charge in the financial sector, but the finance sector powers 17% of the non-oil GDP. Back in 2019, the government set up detailed framework for licensing crypto exchanges, becoming the first to do so in the Middle East.
A Special Economic Zone
Back in Dubai, the Multi-Commodities Center has set up a special zone with easy visa access and no taxes for Bitcoin investors. Its CEO Ahmed Bin Sulayem is disappointed about the lack of legal framework on what he believes is the next gold rush. Still, Dubai is open and willing to the idea of cryptocurrencies, and with a regulatory framework in place, it will become a Bitcoin heaven to investors.
It offers attractive incentives for entrepreneurs such as 0% capital gains tax and safety in a complex region. That’s paired with a carefree lifestyle in sunny Dubai, which might be the country’s ace in the sleeve. Binance’s CEO ZH certainly knows that, having recently bought an expensive condo in the city.
It remains to be seen when Dubai providers a regulatory framework for crypto that can turn it into a Middle East Bitcoin powerhouse. For now, Bahrain remains the top destination for investors in the booming market.
