Through innovation and the integration of new technological advancements and a rich cultural legacy, the UAE exemplifies how a nation can preserve its past while developing its future. This approach has served the country well for over 50 years, steering its success across several domains; and as it relates to fintech, the adoption of digital assets by both financial providers and savvy investors is now future-proofing the country’s economy.
Revenue in the UAE’s digital assets market is projected to reach $453.20 million this year. Furthermore, with a forecasted annual growth rate of 8.01 percent over the next few years, this number is on pace to skyrocket by just over 36 percent, resulting in a total amount of $616.80 million by 2028. Let’s explore what factors are contributing to the industry’s promising outlook ahead.
Economic diversification efforts displayed by fintech adoption
In the same way that the UAE has been diversifying its economy away from oil for multiple decades, fintech is yet another domain in which the country has embraced change to excel. In fact, under the country’s wise leadership, and fuelled by a vision to shape the UAE as a global innovation and financial hub, the nation is on track for remarkable growth; for example, there are over 4,000 fintech firms in Dubai today, and this number is predicted to soar to 7,100 in the next few years, to reflect a 1.8-fold increase.
The Dubai International Financial Centre (DIFC) Innovation Hub is fostering innovation and providing support for startups through funding, mentorship, and networking opportunities to help realise this forecast.
Similarly, in the UAE’s capital, the Abu Dhabi Global Markets (ADGM) Regulatory Laboratory (RegLab) allows fintech startups to test and refine their innovative financial services solutions in a controlled environment under the supervision of ADGM regulators; enabling fintech startups to navigate regulatory complexities effectively, fostering innovation while ensuring compliance with financial regulations.
These are key catalysts in why the UAE’s digital assets market is expected to amount to over three million users by 2028.
The forward-thinking mindset steering the UAE’s success
The UAE’s favourable regulatory environment is an instrumental pillar of its success as its understanding of the importance of policy reform enables it to remain competitive while nurturing its economic success.
For instance, in the same way that Golden Visa reforms over recent years have enabled the country to attract top-tier talent from around the world, progressive policies like the Virtual Assets Regulatory Authority (VARA) have enabled several companies like ours to thrive by offering investors in the region a secure and compliant platform to engage in digital asset trading.
Several trends exist in the fintech space – from NFTs to stablecoins and decentralised finance (DeFi) to blockchain technology – and savvy investors are pursuing ways to participate in financial activities without relying on traditional financial institutions.
There is a growing awareness of the potential benefits of digital assets (i.e., lower transaction costs, faster transaction times, and increased liquidity) and the UAE has done a tremendous job of ensuring investors have access to these trends which are increasingly popular today but also poised to shape tomorrow’s future.
Prioritising cybersecurity to prosper onwards
On the topic of shaping tomorrow’s future, security is of the utmost importance. The development of new use cases for digital assets will drive further growth in the coming years, but the industry’s vulnerability must be addressed; and this is where cybersecurity, something that remains a critical concern in 2024, comes into play.
In the first quarter of this year, the fintech sector experienced a substantial surge in application layer DDoS attacks. A DDoS attack, in layman’s terms, is when a website or online service is flooded by so much traffic that it crashes and becomes inaccessible to users. Given that speed and convenience are two of consumers’ most desired requirements in today’s tech-driven landscape, cyber threats such as these risk a company’s ability to conquer market share in the same way that it prevents a country from seeing economic growth.
The UAE has accordingly implemented stringent measures to ensure investor protection and market integrity. For example, the Securities and Commodities Authority (SCA), exemplifies the UAE’s forward-thinking efforts as this body plays a pivotal role in overseeing the issuance and trading of crypto assets, setting high standards that bolster investor confidence.
Similarly, companies who develop robust infrastructure – and protect it to the best of their ability – will be well-positioned to excel as the industry grows, while also aligning with the pioneering vision of the UAE and contributing to its upward trajectory.
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