Dubai’s Department of Economy and Tourism (DET) Chief, Helal Saeed Al Marri, has stated that the collapse of the cryptocurrency exchange platform FTX had no effect on Dubai’s economy. Speaking at Investopia, Al Marri explained that the impact of cryptocurrencies on Dubai’s gross domestic product (GDP) was relatively small, but the sector was one of several new ones being explored by the Emirate.
Robust regulations in place
Al Marri confirmed that virtual asset regulations had been put in place, ensuring that companies had to undergo a rigorous process to operate in Dubai and the United Arab Emirates. As a result, FTX was unable to gain a foothold in the region and its collapse had no impact on the economy.
FTX Trading was founded in 2019 by Sam Bankman-Fried and Gary Wang, and at its peak in July 2021, had over one million users. The cryptocurrency exchange platform filed for bankruptcy before it had a chance to gain a foothold in the region late last year. The platform was enveloped in a global scandal.
Al Marri said that Dubai had developed a full-fledged regulation for virtual assets, ensuring that companies had to go through a rigorous process to operationalize in Dubai and the UAE. He said,
“Initially, when we met companies like FTX, we were, of course, none the wiser about how it would turn out. But we did know that we worked very closely with the industry to put in a set of regulations that ensured people had to go through a very rigorous process to operationalize in Dubai and the UAE.”
Al Marri’s statement on FTX’s collapse supports the DET’s decision to regulate virtual assets carefully. “And luckily, that was in place because FTX didn’t get to operate in the UAE. And it didn’t have any impact on the economy here as a result,” he added.
The Dubai Economic Agenda (D33) was launched recently and aims to help the Emirate prepare for more initial public offerings (IPOs) from state-owned and private enterprises. Al Marri noted that the initiative puts in place key priorities and rallies all private and public sector around.
He also highlighted that the partnership between the private and public sector would allow them to move forward across areas such as talent and environmental, social, and governance (ESG) practices in addition to the key sectors such as finance, manufacturing, and technology.
Without naming specific companies, Al Marri mentioned that Dubai is ready for more IPO listings from state-owned and private enterprises. He added that the city is exploring several new sectors, including cryptocurrencies. Al Marri’s comments suggest that the Emirate’s economy is well-prepared for future IPOs and is looking to attract more investment.
Tourism is another sector that has been impacted by the pandemic. Al Marri explained that Dubai’s tourism strategy had gained considerably from relying on something other than specific countries for growing its visitor numbers. “Tourism in the UAE is route-focused. We learned quite a long time ago not to rely on specific countries and tried to use the airlift. We have to develop a diversified strategy,” he said.
Although Chinese tourists have started returning, Al Marri expects total recovery post-pandemic in six to 12 months as it takes about that long for the aviation network from China to operate again fully. “Until that’s resolved, you’ll always have supply pressures. We’re looking at numbers normalizing by the Chinese New Year next year,” said Al Marri.
Dubai’s economy remains strong and has not been impacted by the collapse of FTX. The Emirate is actively exploring new sectors and is prepared for more IPO listings from state-owned and private enterprises. Dubai’s tourism strategy has also been successful in attracting visitors from diverse sources.