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Sun 16 Jun 2019 03:14 PM

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UAE second in global token sales

The country accounted for more than a quarter of global funds raised in Q1 2019

UAE second in global token sales

The UAE has been ranked second in the world for largest token sales up to June 2019.

According to Coin Schedule, the UAE accounted for more than a quarter of global funds raised in Q1 – last year the country didn’t even rank in the top 10. Only the British Virgin Islands has attracted more token sales in 2019.

One of the main reasons for this leap in token sales is tied to two specific deals; GCBIB raised $142 million in developing banking and insurance products for the UAE token economy, and Bolton Coin’s STO raised $67 million by offering a way to invest in various asset classes including real estate and crypto mining.

Ahmed Jacob, managing partner and CTO of INVAO, said: “The major players in the UAE understand the growth potential of blockchain technology used for developing an economy and are looking for the right investment opportunities with the right advice on return on their investments, this can be comfortably achieved with many local digitalized projects and initiatives we are currently managing.”

The UAE government has launched its Emirates Blockchain Strategy 2021, with the goal of transferring 50 percent of government transactions onto a blockchain-based platform by 2021.

While Smart Dubai Government Establishment, a city-wide initiative to transform Dubai into the world’s smartest and happiest city, implemented blockchain technology to its department towards the end of 2018, endorsing the power of technological development to improve business, finance and economy.

The Abu Dhabi Global Markets already has blockchain-specific regulations in place. And the UAE and Saudi-Arabia’s central banks are also currently experimenting with a digital currency to facilitate cross-border transactions.

In a statement sent to Arabian Business, the Dubai Financial Services Authority (DFSA) said that it "does not have any specific blockchain regulation in place."

"Indeed, many promising uses of Distributed Ledger Technology do not require regulation. The DFSA is undertaking policy work to consider how the DFSA could apply its regulatory regime to Security Tokens (created and distributed using Distributed Ledger Technology), and associated activities, in or from the DIFC," said Peter Smith managing director, head of strategy, policy and risk at the DFSA. 

Based on the fourth International Coin Offering (ICO) by PwC Strategy in co-authorship with Crypto Valley Association (CVA), there are over 1,132 ICOs/ security token sales (STOs) which have happened successfully in 2018 - twice as much as in 2017 (total of 552). The total amount raised has nearly tripled to almost USD$20bn compared to 2017 (total of USD$7bn).

“There are exciting times ahead for token sales or ICOs in the UAE. We foresee a bright future as investors from this region are early adopters and the UAE has been at the forefront of the crypto market," Leon Smith, founder, and CEO of DEX, told Arabian Business. 

"Since it is still in its nascent stage, the cryptocurrency market is gaining ground and serious players such as DEX, support the UAE government’s efforts to put into place onshore regulations governing sales of ICOs or STOs," he added. 

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