Innovative initiatives and a rapidly growing acceptance are helping the country become a pioneer in virtual assets. The local real estate market could benefit greatly.
The U.A.E.’s ambition to become a leader in the cryptocurrency and metaverse industries received a significant fillip with the announcement that Dubai’s new cryptocurrency regulator has established a virtual headquarters in ‘The Sandbox’ metaverse. In doing so, the Virtual Assets Regulatory Authority (VARA) becomes the first regulator in the world to build a metaverse headquarters.
VARA was inaugurated in March of this year to oversee cryptocurrency trading and the exchange of other virtual assets, including the highly-popular NFTs. The body aims to provide engagement between global Virtual Asset Service Providers (VASPs), industry leaders and commentators, and international regulatory authorities. However, it excludes transactions occurring within the Dubai International Financial Centre (DIFC), which has its own regulatory framework for virtual assets.
This strident move builds on a growing push for digitisation in the country, which has already seen the local real estate market start to accept cryptocurrencies including Bitcoin and Ethereum as eminently viable forms of payment.
Property market-doyen Nakheel has entered into an exclusive partnership with global institutional digital currency platform Havyn. The partnership will allow Nakheel customers to pay for a range of transactions including rent, service fees and real estate purchases using cryptocurrency. This adds to general ease-of-business and lets clients enjoy trademark cryptocurrency benefits, including no cheques. Nakheel’s landmark decision marks the first time the United Arab Emirates has seen a regulated real estate cryptocurrency payment solution.
Not to be left behind, property giant Damac has also announced that it will begin accepting Bitcoin and Ethereum as methods of payment for properties purchased. This forward-looking step builds on previous Damac ventures, including the investment of USD $100 million in building digital cities in the metaverse through an initiative called D-Labs, as well as the popular 3D virtual experiences offered by the group’s property arm that uses virtual reality (VR) and augmented reality (AR) technologies.
The United Arab Emirates has rebounded well from the pandemic, with the recent success of Expo 2020 greatly enhancing the recovery. This large-scale exploration of virtual assets augurs well for an expanding property market and follows on from news reports of a variety of smaller businesses and organisations embracing cryptocurrency. Along with the recently-announced slew of Golden Visa amendments, it is expected that this proliferation of virtual transactions will boost the real estate sector’s already-high ease-of-transaction and attract greater property investment. This bodes well for a hub of luxury property like the U.A.E., which aims to become a global centre for the virtual assets industry too.