Effects of Digital Transformation in Datacentres
20 Dec, 2024
The United Arab Emirates (“UAE”) is made up of seven Emirates, two financial freezones, and over 50 freezones. It is a melting pot of more than 200 different nationalities, a wide variety of cuisines, and not to mention nearly 365 days of sunshine. As such, it is no wonder that the UAE has become such an attractive place to live, leading to a vast uptick in migration, the emergence of new industries and sectors, and a continued boom in FinTech related developments. There have been a number of interesting developments over the last 12 months which we explore below:
HODL crypto: The UAE is solidifying its position itself as a key player in the crypto asset space. The Virtual Assets Regulatory Authority of Dubai has become the world’s first bespoke crypto asset regulator, providing a unique regulatory landscape for crypto assets, while the Central Bank of the UAE has developed one of the first global regimes focused on regulating stablecoins. The Financial Services Regulatory Authority of the Abu Dhabi Global Market, meanwhile, has issued updated rules regarding fiat backed tokens, notably proposing that holders of such tokens are allowed to keep income that arises from reserve assets held by firms, which differs to that of the UK and Europe. Additionally, the Dubai courts have recently recognised the possibility of employee salaries being paid in crypto assets, something that is not formally recognised in many countries. These developments reinforce the idea of the UAE being an attractive market for the crypto asset industry and the UAE positioning itself as a pioneer in this space by creating an environment to encourage and foster the use of crypto assets in everyday life.
Artificial intelligence: Dubai is taking charge in artificial intelligence (AI) with the recent opening of the DMCC AI Centre, focused on developing AI in the MENA region. The DMCC AI Centre has mandated to work alongside the DMCC Crypto Centre and the Gaming Centre to enhance AI in the Emirate. With Dubai hoping to be a global leader in AI by 2031, the establishment of a bespoke centre focused on AI is putting it on good stead to meet this ambition. The focus on AI showcases the UAE’s continued push to lead the way in global financial innovation.
Buy now, pay later (BNPL): The BNPL model is rapidly reshaping consumer purchasing behaviours in the UAE. Research shows that BNPL payments are expected to grow by 18.5% on an annual basis to reach $2.45 billion in 2024. The UAE regulatory framework has also seen a shift, with new regulations issued by the UAE Central Bank requiring firms to obtain a license to operate in the market. These guidelines, coupled with the rising commercial adoption, are projected to support sustainable industry growth in BNPL, making this a prime area for FinTech development.
By Yasmin Johal, Associate at CMS
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Innovation and growth are at the heart of the FinTech industry, with global hubs like the UAE leading the charge in transformative developments such as crypto regulation, artificial intelligence, and evolving payment models like BNPL. These advancements reflect the broader trends shaping the sector and align closely with the work we do at Harrington Starr, connecting top talent with pioneering organisations and supporting industry growth through initiatives like The Financial Technologist Magazine. Featuring the prestigious Top 1% Workplace Awards 2024, the magazine highlights the organisations and regions driving progress, fostering exceptional workplace cultures, and positioning themselves as leaders in FinTech innovation. Discover more about the companies and initiatives setting new standards for excellence by downloading the latest edition here:The Financial Technologist – Top 1% Workplace Awards 2024.
