It’s the most important tech breakthrough since the Internet and, in need of a place to push the limits of what it can achieve, blockchain’s leading pioneers from around the world are arriving to play in the GCC’s sandboxes.
Perhaps the most revolutionary idea of our generation, blockchain is changing the mechanics of how the world works. Created from the global need for an accurate, secure, automated and decentralised way to keep records, its potential applications are now endless.
GCC governments know they have a vital role to play in driving the development, adoption, and use of blockchain – which itself provides the foundations for many parts of their economic diversification policies. To this effect, in December 2017, the governor of the UAE’s central bank announced that it was undertaking a joint project with the Saudi Arabian Monetary Authority to use blockchain technology to issue a digital currency accepted in cross-border transactions between the two countries.
Now on a mission to court the world’s brightest minds, GCC governments have initiated dozens of projects across the region to push the boundaries of what can be achieved.
In Dubai, where blockchain is already used for health records, the government will be “fully powered by blockchain” by 2020, removing the burden of almost 100 million documented processes from administrators. A pioneer of the technology, in February 2016, Dubai’s Museum of the Future announced the formation of a research group focused on blockchain technology and high-profile brands such as IBM, Emirates Airlines, and Careem are all working on new applications in the emirate. Dubai has also attracted the attention of Cisco and SAP, thousands of start-ups and the bitcoin exchange, BitOasis. Further, Dubai International Financial Centre launched its 12-week FinTech Hive accelerator in 2017 and is scheduled to repeat the programme in 2018.
Active for a number of years, Abu Dhabi Global Market (ADGM) has facilitated multiple sandboxes for fintech start-ups. In November 2016, it launched the FinTech Regulatory Laboratory and has since collaborated with the Responsible Finance and Investment Foundation on ethical Islamic fintech, and launched the Fintech Abu Dhabi Innovation Challenge, with international accountancy firm KPMG.
Bahrain’s blockchain ambitions will be realized through the integration of a digital currency with the country’s traditional financial systems. Additionally, Bahrain Central Bank launched a sandbox in 2017 for existing CBB licensees and other local and foreign firms and welcomed the London-based cash management company Tramonex and Dubai’s NOW Money that August. In addition, Bitcoin exchanges are now being pursued following a partnership with an established Bitcoin company from Saudi Arabia.
Fintech is an integral element of Saudi Arabia’s Vision 2030 and, in October 2017, Bank Aljazira announced a first-of-its-kind application for the region using blockchain-based identity management from ShoCard to eliminate the potential for fraud during online and ATM transactions. In addition, the Jeddah-based research arm of the Islamic Development Bank plans to use blockchain technology to develop sharia-compliant products, aiming to support financial inclusion efforts across its member countries.