Last month, Dubai International Financial Centre (DIFC) hosted Blockchain Week as part of our continued efforts to develop the innovation sector and connect key players in the ecosystem to help accelerate the transformative potential of a technology we believe is set to be fundamental to our digital future.
The series of events, which took place at the DIFC Innovation Hub, the region’s largest innovation ecosystem, saw leading experts in the sector engage in spirited discussions around the most important issues and opportunities around the technology.
The event featured speakers from key players in the blockchain ecosystem including Ripple, CoinMENA, SmartCrowd, Tezos, Arabian Bourse, CXDA, Rain, Bit Oasis, Binance, Dubai Blockchain Centre, Microsoft for Startups, Dubai Digital Authority, and many others.
Industry delegates, from regulators to FinTech companies, technology experts and consultants, shared ways to expand blockchain use cases in the UAE and the Middle East and Africa region.
As delegates discussed the great promise of this technology however, they did so with the caveat that blockchain technology must not be viewed as the “silver bullet” for every scenario.
Rather, they urged leaders across different sectors to keep challenging whether they are making the right use of blockchain and focus on developing use cases that create the most value for the future transformation and growth of their industries.
The week further highlighted Dubai's instrumental role in employing the transformative potential of blockchain to fuel the future of smart cities, court systems, real estate, SME finance, digital assets and more.
Experts agreed that the UAE has a robust legal foundation and an agile government to support blockchain technology and pave the way for rapid adoption, including across its legal system – an area in which DIFC Courts is keen to make strides, having already established the world's first Court of the Blockchain.
They added that blockchain represents huge potential in areas such as cross-border enforcement but implementation of such a platform would need buy-in from other global court systems too as well as investment.
Currently, the DIFC Courts are looking at use cases for wills services that would make enforcement faster and easier for expatriates and investors.
Transfer of value, record-keeping and notarisation (which is partially satisfied by digital technology) were also among the use cases delegates said are already seeing progress in the UAE that could profoundly impact businesses, communities and society.
Blockchain-powered SME financing
Meanwhile, blockchain could also revolutionise the challenges of financing for small and medium businesses.
“It’s very clear to the DIFC that the SME sector is what drives Dubai's economic growth and job creation,” Mohammad Alblooshi - Sector Head FinTech & Innovation – DIFC Authority, said during a panel session on SME financing.
“The DIFC recognises the need to develop the SME sector within financial services and that is why we tweaked our proposition from a licensing, real estate and regulatory perspective and came up with idea to create a campus within the Centre, which could be a catalyst of growth for DIFC and Dubai.”
From origination to underwriting, servicing, investment, securitisation and trading, blockchain-powered SME finance would solve a $5 trillion problem in terms of need and increase contribution to GDP, particularly in emerging economies, according to delegates.
Smart cities and societies
Delegates agreed that while big data and Internet of Things (IoT) technologies bring well-proven benefits to economies, they also come with limitations in terms of the quality, fragmentation and inconsistency of the data collected.
Panelists explained that blockchain facilitates a mechanism and framework for significantly more data sources to generate more in-depth and cohesive insights. These in turn enable smarter real-time data-driven decision making at scale to empower entire cities and societies to be more sustainable and smarter.
Panellists pointed to the Dubai government's recent move to create a single window for digital development and regulation with the establishment of the Dubai Digital Authority (DDA), which consolidates Smart Dubai, the Dubai Data Establishment, the Dubai Electronic Security Center and the Dubai Statistics Centre.
The DDA will serve as Dubai’s official body responsible for all matters related to information technology, data, smart & digital transformation and information security.
The city's warp-speed pace of development in multiple economic sectors means that traditional processes needed to be continuously and quickly updated. Leveraging emerging technologies such as blockchain, can significantly accelerate this transformation as aligned with the UAE’s Vision 2021, 4th Industrial Revolution Strategy, Digitalisation Strategy and the National Policy for Quality of Digital Life.
Given the significant potential for innovation-related growth, DIFC plans to quadruple the size of the DIFC Innovation Hub to 315,000 sq. ft, particularly in view of the longer-term opportunity with the impact of innovations pioneered by the finance industry crossing over into other industries and driving the future economy.
The week’s highlights also featured an exclusive breakfast roundtable hosted by DIFC for CEOs from financial institutions, large corporations, start-ups and SMEs across the region. The session provided a forum for leaders in the field to share insights and opinions about the future of investment innovations such as non-fungible tokens (NFTs), cryptocurrencies and digital assets.
Delegates agreed that while the technology’s applicability across sectors is still being developed it is up to the community to come together to shape uses and governance. It was said that much like Picasso’s cubist period, blockchain adoption should be looked at like a technology movement by a community. All agreed that we could be on the brink of the fundamental evolution of money and this is why DIFC sees cryptocurrencies and digital assets playing an important role in next generation finance and is focused on spearheading its growth.
As the week concluded, the consensus is that blockchain is a “game changer” for financial services and that adoption will continue to accelerate in the financial and general business environment as the technology reveals new use cases that improve productivity, reduce costs, enhance transparency and generate new revenue streams.
DIFC continues to create environments and ecosystems to foster innovation that helps redefine Dubai’s next wave of economic growth, not only in financial services, but also across other industries. In line with DIFC's future of finance strategy, which harnesses local and global talent, disruptive technologies and collaboration to solve key industry challenges, the Centre continues to be a connecting force to drive pioneering blockchain-based initiatives and promote the adoption of blockchain technology.