The UAE is fast emerging as the digital finance capital of the region and a global digital hub, helped by conducive regulations, government leadership and talent inflow.
The UAE is driving digital transformation with the adoption of digitization across public and private sectors.
The UAE government recently approved a Digital Economy Strategy that aims to increase the contribution of this sector to 20 percent – more than doubling the current target of about 10 percent in 10 years.
Also, the emergence of blockchain-based financial transactions and the development of regulatory frameworks for digital assets in onshore and offshore jurisdictions within the UAE gives it a clear competitive advantage in digital finance.
As the Metaverse becomes the centre of digital transition for economies and enterprises, it does not yet have an industry-wide definition. It can be thought of as one conceptual iteration of the internet supporting a collection of real-time applications and experiences across devices.
As businesses prepare for the Metaverse, the next generation of the internet (Web3) – which combines virtual reality, virtual money and virtual transactions – the UAE is set to emerge as a leader in Metaverse finance (MetaFi).
MetFi is a combination of decentralized finance (DeFi), centralized finance (CeFi), and traditional finance (TradFi), with new products designed to meet the unique needs of the new economic ecosystem.
Financial services in Metaverse
Financial services will play an important role in the evolution from capital formation to supporting commerce within the Metaverse. Fundamental to its economic infrastructure would be a high-transaction throughput financial infrastructure, necessitating need for payment rails in the Metaverse. Financial institutions can also play a role in providing liquidity, including for certain DeFi protocols as well as financing in the Metaverse.
The UAE’s banking sector has witnessed rapid developments in digital transformation with digitization of existing services, a number of digital-only services, and blockchain-based transactions.
Full steam on digital
According to Citibank’s Digital Money Index, the UAE is ranked fifth globally, behind Switzerland, Luxemburg, Hong Kong and Singapore. The UAE is far ahead of its Gulf peers with Qatar at 10, Bahrain and Kuwait at 31 and 33, respectively.
Ghose believes UAE’s digital money readiness potentially ties into the Metaverse, which is emerging as the next potential big-tech. Metaverse combines the physical and digital worlds in an immersive manner – and not purely in the virtual reality space. It would require countless new technologies to come together, including applications around Web3, DeFi and non-fungible tokens (NFTs).
Enterprise use cases of the Metaverse will likely include internal collaboration, client contact, sales and marketing, advertising, events and conferences, engineering and design and workforce training.
According to gulfnews.com. Source of photo: internet