Why is Dubai Building a Specialised Crypto Skyscraper?

In Dubai, the construction of a new 17-story building called Crypto Tower is planned. It is designed to house companies operating in the fields of blockchain, decentralized finance (DeFi), and Web3. The project is being developed jointly by the Dubai Multi Commodities Centre (DMCC) and REIT Development.

DMCC (Dubai Multi Commodities Centre) is one of the largest and most influential free economic zones in Dubai. This is not the first such initiative by the company; in 2021, DMCC launched the Crypto Centre, which became a specialized hub for startups and companies working in blockchain, cryptocurrency, and Web3.

Key Features of Crypto Tower

Let’s list the basic ones:

• Number of floors and space allocation. The plan envisions 17 floors with a total area of 13,935 square meters. Nine floors will be dedicated to offices for cryptocurrency startups and companies, while three floors will house blockchain incubators, venture funds, and firms specializing in artificial intelligence (AI).
• Use of blockchain technologies. According to DMCC’s vision, all transactions between tenants in the tower will utilize blockchain technologies. For example, voting will be conducted via a decentralized network, where each participant has a unique identifier, and the results will be verified using smart contracts.
• Additional facilities. Crypto Tower will also include commercial spaces, primarily business-class outlets such as car showrooms and jewelry stores. Additionally, there will be dedicated areas for hosting events related to digital assets, such as a crypto club for networking within the community and an NFT art gallery.

The CEO of DMCC noted that the creation of Crypto Tower is a groundbreaking step at the intersection of technology and real estate, emphasizing Dubai’s commitment to adopting advanced technologies. He highlighted that the tower would serve as a tangible demonstration of the Web3 future, where transparency and ownership are guaranteed by blockchain technologies.

At present, the building is in the planning stage, but the land for the project was purchased back in 2021. It is expected that after its completion in 2027, Crypto Tower will strengthen Dubai’s position as a leading hub for cutting-edge digital technologies, particularly in the growing blockchain market.

Why Dubai?

Dubai became the first city in the world to establish a specialized regulator for virtual assets, known as the Virtual Assets Regulatory Authority (VARA). VARA handles:

• Licensing of crypto exchanges and companies.
• Combating money laundering (AML).
• Issuing permits for legal cryptocurrency trading, mining, and blockchain product development.

Dubai also integrates blockchain into its government and commercial operations:

• Dubai blockchain strategy 2020. This initiative aims to migrate all government operations to blockchain to increase transparency and reduce corruption. It is projected to save up to AED 5.5 billion ($1.5 billion) annually through process automation.
• Smart Dubai office. The government body responsible for technological advancements has developed a platform for storing and processing data on blockchain. It is used for:
  • Registering real estate transactions.
  • Maintaining medical records.
  • Business registrations.

Thus, Dubai stands out with the most advanced methods for regulating and utilizing blockchain technology. Funding various sectors not only enables the emirate but also the UAE as a whole to diversify its assets and generate profits beyond oil revenues.

Competition in the Blockchain Industry

The development of the blockchain industry is taking place amid global competition between countries and cities striving to become centers of digital technology. In addition to Dubai, Singapore, Switzerland, the United States, and Hong Kong are actively advancing their positions in this field.

Singapore. Singapore is considered one of the most stable hubs for cryptocurrencies and blockchain in Asia, thanks to government support for blockchain startups. On the domestic front, the Project Ubin initiative integrates blockchain into the banking sector, including payment systems. However, in 2022, Singapore tightened regulations for retail investors by banning the use of credit for crypto trading.

Switzerland “Crypto Valley” in Zug. Switzerland was one of the first countries to adopt blockchain at the legislative level. The country has legalized tokenized assets, including shares, and offers direct integration of cryptocurrencies with traditional banks such as Sygnum and SEBA Bank. However, for small startups, high operating costs often become a significant barrier to working in Switzerland.

United States. The United States is the largest market for blockchain investments. Major companies such as Coinbase, Circle, and Ripple are headquartered in the U. S. The favorable climate is partly due to government projects, including pilot programs for blockchain use in supply chains and digital identity verification. However, there is regulatory uncertainty in the U. S., as different states have their own laws, which often conflict with or contradict federal regulations set by organizations such as the SEC and CFTC.

Hong Kong. Hong Kong has recently reasserted itself as a crypto hub. In 2023, the government introduced a new regulatory framework governing blockchain and DeFi technologies. Hong Kong is also actively testing the digital Hong Kong dollar and exploring the use of blockchain in public services. It is important to note that Hong Kong is part of China, which still imposes strict restrictions on the use of cryptocurrencies. However, this would only become a significant issue if the Chinese government unified the legal and regulatory frameworks.