|Posted by Ernest John Fleckenstein on May 1, 2019 at 2:45 PM|
Dubai belongs to one of the largest and fastest growing urban centres in the world. The story of its development began with oil and gas; however, they represent only a fraction of the contemporary revenues. Other business sectors, including financial technology, have come to the forefront.
Dubai’s economic transformation was not accidental; it was part of a sophisticated policy focusing on the future potential. Consequently, the Dubai Emirate has become the tech-leader of the whole Middle-East area (MEA). The establishment of free trade zones (more than 20 nowadays) with tax credits guaranteed by investors, no import or export duties and minimal obligations towards local authorities have soon bore fruit. Moreover, companies based in these zones benefit from low administrative burdens and a perfect infrastructure. The functioning of free trade zones is supervised by licensing offices. It is no accident that Google, Microsoft, Oracle, Hewlett Packard, Dell, IBM and many other multinationals have their domicile there. This location is sought after and according to estimation the area will double in size over the next five years.
Dubai International Financial Center
Dubai’s economic progress is managed by the local government headed by Mohammed Bin Rashid Al Maktoum, who immensely fosters innovation in the emirate. The government's active approach to new forms of business can be witnessed also in the fact that the son of the current emir Sheikh Maktoum bin Mohammed Al Maktoum is the president of Dubai's largest international free-trade area, the DIFC (Dubai International Financial Center). It hosts almost two thousand banking, insurance, property management and other companies. DIFC offers its clients many benefits, including a 50-year zero taxation guarantee.
The Emirate development policy led to recognition of Dubai as one of the world’s top FinTech hubs, and the real leader in the MENA region. The development of the city as a global financial centre is proven by the fact that it ranked on position 19 in the GFCI 2018 (Global Financial Centers Index), leaving behind Frankfurt, Paris or Abu Dhabi. Dubai has become the largest financial centre in the MENA region.
The key accelerator of this evolution is financial technology, which has a broad impact on Dubai’s economy. FinTech start-ups in the region have raised over $100 million of funds over the last decade and this sum is predicted to double by 2020.
“FinTech is not just about digitising money, it’s about monetising data. It’s about how we can create and capture the value‑add from data, previously limited by the technology we had available. It is the second‑round value surge that is now starting to flow from an increasingly digitised economy.”
The MENA fintech industry is seeking for more venture capital to fund growing fintech start-ups, which number grows year by year up to more than 450 start-ups predicted by 2022. According to Accenture analysis, investments into start-ups will increase from $287 million in 2019 to $2.28 billion by 2022.
The UAE is also the Middle East leader in Islamic fintech start-ups. Although the global leader is Indonesia, UAE ranks third, globally. Islamic finance has been developing rapidly throughout this century with financial assets forecasted to $3.8 trillion by 2022, according to Thomson Reuters. The growth of the Islamic finance industry is driven by young, digitally native Muslims that are on average younger than the world’s non-Muslim population.
The Middle East edition of Forbes made a ranking of the 20 best Middle East fintech start-ups in 2018. OneGram ranked 13th as the only Middle East company developing a cryptocurrency based on blockchain technology.
The first Shari’ah-compliant digital asset encased in blockchain
OneGram was designed from the very beginning as a non-bitcoin reliant currency. Its inner architecture brings innovations not only to the broad Muslim community, but also to any investor who is interested in this unique digital payment solution.
The compliance with Shari’ah principles is accomplished by a backing model using a tangible asset — namely gold, which is one of the six allowed commodities in trading. Each coin is backed by at least one gram of gold. OneGram thusintroduces Islamic Finance to an era of disruptive technologies.