Dubai businesses embrace crypto as the future of payments

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Updated 01 May 2022

Dubai businesses embrace crypto as the future of payments

Dubai businesses embrace crypto as the future of payments
  • There is a possibility that the digital ecosystem in the UAE is set for bigger things

DUBAI: If you thought that the worldwide media coverage of Dubai’s new crypto laws announced in March was a blip on the radar screen, wait until you see the frenzy with which traditional shops and institutions are embracing digital currencies.

Close on the heels of several global crypto exchanges bagging commercial licenses and moving headquarters to Dubai, a motley mix of neighborhood establishments have opened its doors to people willing to lighten their wallets with bitcoin and the like.

Situated in Al-Quoz, Bake N More is a coffee and pastry shop that will go down in local history as the first cafe in Dubai to accept cryptocurrency from its customers. While the cafe still accepts cash and credit cards, it welcomes a mixed bag of digital payments, including Bitcoin, Ethereum and Tether.

“There’s been tremendous interest in cryptos because people see this as the future payment gateway system, especially those who have held on to them for a long time and are now looking to cash them,” Mohammad Al-Hammadi, owner of Bake N More, told Arab News.

The contemporary cafe’s open-source payment platform is handled by Mixin Network, a lightning-fast and decentralized platform that brings speed and scalability to blockchain and facilitates the transfer of digital assets.

Explaining the payment system to Arab News, Al-Hammadi said that it would charge customers by converting the cost of an item into its value in cryptocurrency. For instance, if a bottle of water costs 5 dirhams ($1.36), the price payable in TerraUSD, a Stablecoin built on the Terra blockchain, would be about 1.36UST as it is pegged 1:1 against the US dollar.




Mohammad Al-Hammadi, owner of Bake N More

New school of thought

The emergence of cryptocurrency as a mainstream tender has also invited the attention of Citizens School, an educational institution situated in the plush Al-Satwa locality. Come September, the UK-curriculum non-selective school will let parents pay the tuition fees in Bitcoin
and Ethereum.

“The reason we are accepting crypto payments is to start a conversation among parents and children about the technology that will influence the lives of the young generations,” said Hisham Hodroge, CEO of Citizens School.

He further added that nearly 10 percent of the parents who have enrolled their children opted to pay in cryptocurrency. The 43,000 sq. m. school campus has a capacity for 2,600 children, and fees range from 36,000 dirhams for Early Years Foundation Stage 1 up to 52,000 dirhams for Year 6.

HIGHLIGHTS

• Situated in Al-Quoz, Bake N More is a coffee and pastry shop that will go down in local history as the first cafe in Dubai to accept cryptocurrency from its customers. While the cafe still accepts cash and credit cards, it welcomes a mixed bag of digital payments, including Bitcoin, Ethereum and Tether.

• The contemporary cafe’s open-source payment platform is handled by Mixin Network, a lightning-fast and decentralized platform that brings speed and scalability to blockchain and facilitates the transfer of digital assets.

• The emergence of cryptocurrency as a mainstream tender has also invited the attention of Citizens School, an educational institution situated in the plush Al-Satwa locality.

“A while ago, cryptocurrency was only a floating term among well-versed investors. However, today cryptocurrency is becoming much more mainstream, reshaping the traditional financial system,” said Adil Alzarooni, founder of Citizens School, in a statement.

Not too long ago, even investment circles barely knew about the dark alleys of the deep web, the seedy corner of the Internet that offers anything from criminal services to cracked credentials to counterfeit money for instant exchange of cryptocurrency.

But the instrument soon gained legitimacy when the investment community began counting on it to hedge risk against rising inflation. The outcome was bizarre because it led to an exponential rally that led Bitcoin to touch a dizzying height of over $68,000 in November 2021. Just five years ago, a single Bitcoin was worth about $700. The meteoric rise became a talking point across the treasury benches globally.




Hisham Hodroge, CEO of Citizens School

Crypto penetration in UAE

According to blockchain data platform Chainalysis, the UAE, estimated to be the third-largest crypto market in the Middle East after Turkey and Lebanon, totaled a transaction value of $26 billion between July 2020 and June 2021. Sovereign governments were left with no choice but to reign over the volatility and tame the beast.

Early this year, the UAE announced a licensing program that would bring it into the league of rival financial centers such as Singapore and Hong Kong.

Last month, the state passed its first crypto law and established a regulatory body to oversee virtual assets.

The government set up the Dubai Virtual Assets Regulatory Authority to oversee the regulation, governance and licensing of cryptocurrencies, non-fungible tokens and other virtual assets. The decision led to a massive influx of global crypto exchanges in the region.

Cryptocurrency exchange Bybit announced its plans to move its headquarters from Singapore to Dubai. Global behemoths such as FTX and Binance received licenses to operate in the city. Crypto.com has revealed its intention to set up its regional office in the city.

“Countries like the UAE have already created governing bodies to measure and promote the growth of virtual assets. It’s keeping itself ahead of most of the world in developing the crypto market,” said Emma McInnes, global sector head of financial services at YouGov, a UK-based market research and data analytics firm.

YouGov recently released a report titled “The Future of Financial Services” based on the sample size of 1,012 in the UAE. The study revealed that 67 percent of UAE residents were interested in investing in cryptocurrencies within the next five years, and 21 percent intended to trade in the next 12 months.

“Like all businesses started using the Internet 20 years ago, they will start using crypto now; it is inevitable,” said Talal Tabbaa, CEO of CoinMENA, a digital assets exchange licensed by the Central Bank of Bahrain.

Salaries in Crypto?

The company recently set up a payment platform for Dubai-based online convenience store Yalla Market that claims to deliver groceries in 15 minutes. The store accepts USD Coin and Tether. What makes the store interesting is that besides launching a new payment method for its customers, the startup is also considering paying salaries via digital assets in the future.

“We can now see that the world is increasingly adopting blockchain and cryptocurrency technologies. We could not stand aside as a company based in the UAE,” said Leo Dovbenko, CEO and co-founder of Yalla Market, in a statement.

The message is loud and clear: Crypto is here to stay, but there is a strong possibility that the crypto ecosystem in the UAE is set for bigger things. However, that is a story for another day.


PIF’s Jada signs MoU with Invest Seoul to boost startups, SMEs

PIF’s Jada signs MoU with Invest Seoul to boost startups, SMEs
Updated 16 sec ago

PIF’s Jada signs MoU with Invest Seoul to boost startups, SMEs

PIF’s Jada signs MoU with Invest Seoul to boost startups, SMEs

RIYADH: Fund of Funds Company, known as Jada and owned by Saudi Arabia’s Public Investment Fund, has signed a memorandum of understanding with Invest Seoul Agency to promote startups and SMEs in both countries.

In a statement posted on Jada’s website, the MoU signed between the two parties seeks to exchange information on entrepreneurial policies and best practices and support startups aspiring to enter the Saudi or Korean markets. 

Invest Seoul Agency is a foreign investment promotion agency established by the Seoul Metropolitan Government.

Mazin Al-Shanbari, director of venture capital, Jada, said the MoU will “contribute to developing the business ecosystem for startups” and support the entry of SMEs “that aim to conduct business in the other country.

As per the MoU, the PIF’s Jada and the Korean agency will facilitate exchange of personnel and organize events such as roadshows, conferences and exhibitions to help entrepreneurs from both sides explore opportunities and help them start business.


Moody’s downgrades MEDGULF KSA’s insurance financial strength rating to Ba2

Moody’s downgrades MEDGULF KSA’s insurance financial strength rating to Ba2
Updated 26 September 2022

Moody’s downgrades MEDGULF KSA’s insurance financial strength rating to Ba2

Moody’s downgrades MEDGULF KSA’s insurance financial strength rating to Ba2

RIYADH: Moody's Investors Service has downgraded the Mediterranean and Gulf Cooperative Insurance and Reinsurance Co insurance financial strength rating to Ba2 from Ba1. 

The firm, also known as MEDGULF KSA, is a Saudi joint stock company, and has seen its outlook changed from positive to negative.  

This reflects the challenges MEDGULF KSA faces in improving its underwriting performance and continued pressures on its capitalisation. 

In addition, Moody’s expects the company’s financial flexibility to become more constrained since its rights issue in 2021 with greater uncertainty around its ability to access additional external capital given persistent underwriting losses.

Meanwhile, Moody's has also downgraded the local and foreign currency long-term issuer ratings of Sharjah Islamic Bank to Baa2 from Baa1. 

In addition, the bank's baseline credit assessment was downgraded to ba2 from ba1, while the outlook on its long-term issuer ratings changed to stable from negative.

Moody's says that the downgrade of the bank’s long-term ratings captures the downgrade of the bank’s BCA to ba2 from ba1 and reflects primarily the deterioration in the bank's asset quality.


UAE In-Focus — Arada to open $1.7bn Sharjah office park

UAE In-Focus — Arada to open $1.7bn Sharjah office park
Updated 26 September 2022

UAE In-Focus — Arada to open $1.7bn Sharjah office park

UAE In-Focus — Arada to open $1.7bn Sharjah office park

DUBAI: Sharjah property developer Arada is boosting its portfolio with a 6.3 billion dirham ($1.71 billion) office park and five new residential projects in the UAE.

Arada CBD is spread over 4.3 million sq. feet of prime leasable space located in 40 smart office blocks. 

It will meet demand for a contemporary business district in Sharjah and will cater to the needs of companies throughout the UAE and beyond in the future, Emirates News Agency WAM reported.

According to analysis firm Oxford Economics, the Sharjah economy is projected to grow at a rate of 5 percent annually for the medium-term due to the launch of Arada CBD.

With 96 percent of its gross domestic product derived from non-oil sectors, the Emirate attracted 808 million dirhams in foreign direct investment in 2021, making it one of the most vibrant and diverse economies in the region.

Arada CBD’s first cluster is scheduled to break ground in 2023 and will feature 812,000 sq. feet of Grade A and Grade B leasable space spread across eight buildings.

There are also 1,666 parking spaces, 76,000 sq. feet of landscaped green space, and 26,500 sq. feet of retail space in the cluster.

Arada will relocate its headquarters to the first building of Arada CBD.

When Arada CBD’s first cluster is ready in 2025, the Aljada community will already have 20,000 residents.

Aljada, Sharjah’s largest ever project, covers 24 million sq. feet and will transform the Emirate.

There are numerous residential districts in Aljada, as well as extensive retail, hospitality, entertainment, sports, educational, and health care facilities, all integrated into a green urban master plan.

Approximately 1,500 homes have already been built at Aljada, and 6,000 more are currently being built.

Abu Dhabi and Dubai are the top most liveable cities in the Middle East and Africa

A massive vaccination drive against the COVID-19 pandemic made Abu Dhabi and Dubai among the safest and fastest to recover from the pandemic in the Middle East and Africa, according to the Economist Intelligence Unit.

Both cities remain the most liveable in the region.

As a result of the vaccination campaign, the country avoided a full-scale lockdown in 2021 and, so far, in 2022, EIU said.

The report, published on Sept. 26, marks 1,000 days since the first COVID-19 case was announced to the World Health Organization in December 2019.

According to EIU, Abu Dhabi and Dubai have largely remained open for business since the first wave in 2020.

All target groups were vaccinated against COVID-19 by the UAE in June. Dubai was one of the first major cities to reopen during the pandemic.

Authorities implemented strict policies to contain the pandemic and reopen the city earlier.

As a result of strong trust between the two emirates, Dubai Airport handled 7.12 million passengers while Abu Dhabi Airport handled 6.3 million.

This year, Dubai’s population crossed the 3.5 million mark for the first time.

The region’s top cities to live in include Tel Aviv, Kuwait City, and Bahrain after the two emirates. Damascus, Lagos, Tripoli, Algiers, and Harare are the least liveable cities.


Air Arabia Egypt launches new route between Alexandria and Madinah

Air Arabia Egypt launches new route between Alexandria and Madinah
Updated 26 September 2022

Air Arabia Egypt launches new route between Alexandria and Madinah

Air Arabia Egypt launches new route between Alexandria and Madinah

RIYADH: Egyptian low-cost air carrier Air Arabia Egypt has announced the launch of a new service between Alexandria and Madinah in Saudi Arabia. 

According to a press release, the new flight will be launched from Borg El Arab Airport to Prince Mohammad Bin Abdulaziz International Airport on Oct. 31. 

A single flight will operate from Alexandria every Monday and Wednesday, the press release further noted. 

The latest route to Medinah marks the tenth city that Air Arabia Egypt flies to in the Kingdom, after Riyadh, Jeddah, Dammam, Tabuk, Taif, Al Jouf, Hail, Abha and Gassim.

“We are glad to add Medinah to our growing network from Egypt, offering our travelers with direct connectivity between both cities,” said Adel Al Ali, Group CEO of Air Arabia. 

He added: “We are confident that the new service will further contribute to the overall travel and tourism sector of Egypt and Saudi Arabia through providing an affordable and value-driven travel option to passengers traveling between the two countries.” 

 


Riyadh’s real estate sector continues to witness demand, investment opportunities: KPMG

Riyadh’s real estate sector continues to witness demand, investment opportunities: KPMG
Updated 26 September 2022

Riyadh’s real estate sector continues to witness demand, investment opportunities: KPMG

Riyadh’s real estate sector continues to witness demand, investment opportunities: KPMG

RIYADH: The demand for residential housing units in Riyadh continues to grow despite the recent pandemic-infused slowdown, according to KPMG, citing a rise in population together with increasing urbanization driving demand in the first half of 2022.

In its "Riyadh Real Estate Market Overview" report, the global accounting firm noted that the average selling rate for residential properties in Riyadh stood at SR3,865 ($1,027) per sq.m in the first half of 2022. 

It further revealed that the average residential rental rate in the Kingdom’s capital was SR263 per sq. m in the same period. 

The report further noted that 60.6 percent of Saudi households own villas, while 33.5 of them own apartments. 

On the contrary, 78 percent of non-Saudi households own apartments, while 6 percent of them own villas. 

“The residential market remained resilient during the pandemic which can be attributed to strong demand fundamentals and has witnessed a positive trend in KPIs in the first of 2022,” said Rani Majzoub, head of Real Estate Advisory at KPMG Professional Services. 

Rani Majzoub, Head of Real Estate Advisory at KPMG Professional Services. (Supplied)

The report further noted that the population in Riyadh is expected to reach 7.1 million by the end of this year, and it will touch 7.58 million by 2025, thus opening up more investment opportunities in the real estate sector in Saudi Arabia’s capital city. 

The report pointed out that the current homeownership rate in Saudi Arabia is just above 62 percent, even as the government tries to provide affordable housing to Saudis in line with its goals mentioned in Vision 2030. 

As a part of Vision 2030, Saudi Arabia aims to raise the percentage of home ownership to 70 percent by the end of this decade. 

Retail sector

In the retail sector, KPMG expects Saudi Arabia to record an average sale of SR550 billion in 2022, with a further forecast to touch SR642 billion by 2025. 

The average rental rate in the retail sector stood at SR2,333 per sq. m in the first half of 2022, the report further added. 

It expects the Saudi retail sector to register a compound annual growth rate of 5 percent between 2022 to 2025, as the Kingdom’s market steadily recovers from the pandemic. 

KPMG added that future real estate developments in Riyadh should focus on both tourists and residents, as the Kingdom is currently positioning itself as a “global tourism destination.”

Majzoub added: “As Riyadh is positioning itself as a prime tourism destination, an influx of inbound and domestic tourists can be expected. Hence, future developments should focus on the needs of both residents and tourists.” 

Hospitality sector

In the hospitality sector, KPMG expects budget hotels, which include 3 and 4 stars, to drive healthy performance.

According to the report, the average daily rate in Riyadh hotels was SR652 during the first half of 2022. 

The report added that the hospitality sector offers huge investment opportunities as the number of tourists, including domestic and inbound, to hit 5.87 million in Riyadh this year, which is expected to touch 7.55 million by 2025.

Office sector

As factors like macro-economic indicators, population, and workforce are expected to remain affirmative, KPMG predicted a positive outlook for office space demand in Riyadh in the coming years. 

According to the report, the office market in Riyadh has witnessed a healthy upsurge in the rental rates of both Grade A and Grade B segments in the first half of 2022 with rental rates touching SR1,067 per sq.m.