The United Arab Emirates (UAE) city of Dubai is a vibrant, global trade center bolstered by low taxes, a first class transportation infrastructure and relative stability in a sometimes volatile region.
Recently, Dubai has placed a bold bet destined to further its reputation as one of the fastest growing centers of business and commerce in the world — building a government and economy fueled heavily by blockchain technology.
The Blockchain City
With a population of 2.7 million, Dubai has established a long legacy of digital innovation in the region. Now, it’s entering a new era of technological revolution that cities around the world are keeping a close eye on. Dubai is on a quest to become the first blockchain-powered government, intent on fueling a new ecosystem of economic activity.
At the beginning of this year, Dubai announced plans to develop the first blockchain-based city. Following in the footsteps of Estonia, which has embraced blockchain technology to ensure data integrity, Dubai aims to have all governmental services and activities transferred to the blockchain by 2020, making them secure, traceable and verifiable, while mitigating bureaucratic inefficiencies.
This futuristic blueprint was sparked by the Dubai Future Agenda adopted by Sheikh Mohammed bin Rashid Al Maktoum, the prime minister of the UAE and ruler of Dubai. It’s a roadmap that will focus on engaging various stakeholders from the public and private sectors, including the Global Blockchain Council, a collection of 42 government entities and private companies charged with exploring the best blockchain technology applications. Also contributing will be the Dubai Future Accelerators, a collective of top companies, entrepreneurs and government entities that assess global challenges and pursue breakthrough technological advancements.
A Global Business Hub
In addition to boosting government efficiency, this initiative will promote Dubai as an ideal locale for new businesses. Blockchains will be utilized to drive the creation of thousands of private sector business opportunities. Given the unique propositions of blockchain technology, these efforts will be primarily directed in real estate, fintech and banking, healthcare, tourism, urban development, smart energy and transportation.
The coordinating engine fueling Dubai’s advancement is Smart Dubai, a government office tasked with facilitating innovation throughout the entire emirate. Its role is to facilitate exchanges among key governmental and private organizations to determine which services can be most enhanced by the blockchain.
A series of blockchain pilot projects is expected to take place as a result of this effort. IBM will be the lead strategic partner along with Consensys, a blockchain development consultancy, as an adviser. The Department of Economic Development will serve as the entry point for companies seeking to do business in Dubai, offering assistance in business formation, commercial license issuance and promoting enterprise and trade.
The Department of Economic Development, a government agency, is usually the first stop for any company planning to do business in Dubai. Its role includes the issuance of commercial licenses, protecting the rights of businesses and consumers and promoting enterprise and trade in Dubai.
“We want to make Dubai the first blockchain-powered government in the world by 2020,” Aisha Bin Bishr, director general of Smart Dubai, said in a public statement. “It is disruptive for existing systems, but will help us prepare for the future. We have a very clear objective to make Dubai the capital of the blockchain industry. By 2020, we’ll have 100 percent of applicable government services and transactions happen on blockchain[s].”
Banking, Financial Services and Trade
Emerging as a pillar in Dubai’s push to become the world leader in blockchain innovation is its banking and financial services sector.
One significant early investor has been Emirates NBD, Dubai’s largest bank. In February of this year, the bank started working with IBM and a number of other Dubai stakeholders to examine blockchain’s use for trade finance and logistics.
The banking conglomerate recently launched a pilot initiative called “Cheque Chain,” as a part of a comprehensive strategy to integrate blockchains into existing products and services. The objective of this move is to mitigate fraud while boosting authenticity in the financial system through blockchain’s added layer of security.
Emirates NBD, in conjunction with IBM and other collaborative partners, is also exploring blockchain’s use for trade finance and logistics. Trade is Dubai’s most robust business activity, with its major collection ports and free zones for import/export activity. Total, non-oil foreign trade registered in at nearly $348 billion in 2016.
In an interview with The Wall Street Journal, Ali Sajwani, the chief information officer at Emirates NBD said, “The aim is to replace paper-based contracts with smart contracts that will help reduce complex documentation for the tracking, shipping and movement of goods.”
Ultimately, the grand vision of this initiative in Dubai is to carve out a global standing as the capital of the blockchain industry. While early efforts look promising, it remains to be seen how this bold effort will ultimately unfold.
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