UAE Creates World’s First Digital And Virtual Asset Freezone
Ras Al Khaimah, the sixth-largest city in the United Arab Emirates (UAE), announced the launch of the first-ever economic free zone dedicated to digital and virtual asset companies. The Ras Al Khaimah Digital Assets Oasis (RAK DAO) was unveiled at the ‘Blockchain Life 2023’, one of the leading blockchain technology forums held in Dubai.
During the announcement, Sheikh Mohammed bin Humaid bin Abdullah, chairman of RAK DAO said the free zone will further enhance the UAE’s position as a global leader in inducting innovative technology.
The world’s first digital and virtual assets-free zone is looking to attract entrepreneurs from across the world to build “companies of the future” in Ras Al Khaimah by providing them with a “progressive, supportive, and quick-to-adapt” approach in the country’s ever-growing “innovation-enabling” environment.
Free Trade Zones (FTZ) are areas designated by a country to encourage economic activity. These special economic zones (SEZs) or regions allow foreign companies to trade within a jurisdiction without having to be bound by its trade and commerce laws that are applicable under normal circumstances.
The UAE has a seaport, airport, and mainland free trade zones in all seven of its Emirates, where companies can operate without paying corporate and personal income taxes and customs duties while remaining under complete foreign ownership.
RAK DAO will start accepting applications in Q2 2023
The RAK DAO, which will begin accepting applications in Q2 2023, will be the world’s first free trade zone that is dedicated to providing services to Web 3.0 businesses like blockchain firms, utility token creators, virtual asset wallets, non-fungible token (NFT) creators, Decentralised Autonomous Organisations (DAOs), and decentralized applications developers (DApps).
In recent years, the UAE has launched various programs to turn the country into a global crypto and blockchain hub. Popular cryptocurrency exchanges such as Binance, ByBit, and Crypto.com have set up their regional offices for the Middle East in the country.
Last year, the Dubai Multi Commodities Centre (DMCC) established a ‘Crypto Centre’ to create a regulatory-friendly environment for crypto firms operating in the country. Of the over 22,000 companies in the business district, 500 are blockchain and Web 3.0-based ventures.
The DMCC launched a $150 million accelerator fund in partnership with global VC firm Brinc to support the development of blockchain and Web 3.0 companies registered with the Crypto Center. The Middle East and North Africa (MENA) region’s largest commodities exchange by trading volume partnered with SafeGold and Comtech Gold to release tradable gold-backed crypto tokens on a blockchain ledger.
In November, the Abu Dhabi Global Market, an international business centre and special economic zone in the UAE’s capital, introduced a new blockchain-based system to pass commercial judgments in the Abu Dhabi Global Market Courts. The judicial system is expected to go live in the first half of this year.
In September 2020, the Central Bank of the United Arab Emirates (CBUAE) introduced a new Stored Value Facilities (SVF) Regulation that includes cryptocurrencies. Under the regulation, the UAE government will continue to not consider crypto and virtual assets as legal tender but allow residents to use the financial instrument as stored value when purchasing goods and services.
In 2020, Dubai crown prince H.H. Sheikh Hamdan launched the Dubai Blockchain Strategy, an initiative to support the development and widespread application of distributed ledger technology (DLT) and make Dubai the world’s first city to be run entirely on the blockchain.
The most populous state in the UAE followed up on the project by unveiling the ‘Dubai Metaverse Strategy’ in 2022, which aims to turn the Emirate into one of the world’s top 10 metaverse economies.
The Emirate of Sharjah partnered with metaverse firm Multiverse Labs to build the Sharjahverse. The photo-realistic version of the second most populous city in the UAE is being developed to support the Emirate’s tourism, public service, foreign investment, real estate, energy, and industrial sectors by creating metaverse-related jobs in the economy.