Dubai's metaverse strategy
Dubai builds momentum for metaverse play
Dubai's leadership has always had an eye for what's going to grab the headlines and over the years it has grown highly adept at launching new initiatives that capture the imagination of the media, business leaders and investors worldwide. So, it comes as no surprise that the Dubai government has moved to grab the nascent 'metaverse' opportunity with both hands!
But what exactly is the metaverse and how will it grow economic opportunity?
Perhaps, it is the fact that the term is ill-defined and ambiguous that makes it a convenient flag to fly over new tech-driven initiatives. However, there are pros and cons. Even after social media giant Facebook renamed the company 'Meta', skepticism remains. For the past 30 years, the metaverse has been defined as a hypothetical, immersive virtual world, perhaps where mutliple virtual worlds are linked to allow people to travel seamlessly between them. The reality of this definition is a long way off, perhaps decades.
However, the post-reality nature of the metaverse and any related ambiguities, haven't deterred businesses from piling on the bandwagon. Everyone from Cisco to IBM, Lockheed Martin to Toyota, Coca-Cola to Emirates airline, and almost every major management consulting firm, is now talking about 'the metaverse'.
No matter what you call it, analysts estimate that the metaverse will contribute up to $5 trillion to the global economy by 2030. For example, the market value of non-fungible tokens (NFTs) is expected to reach $80 billion and in-game purchasing by consumers could reach $75 billion by 2025.
Today, the metaverse is increasingly being used to describe the convergence of multiple technologies that help create immersive digital experiences; create social platforms that allow people to communicate, engage and collaborate in 3D; integrate disparate sources of data to replicate past, present and future scenarios from the physical world; and decentralise business information, wealth, payments and legal frameworks.
Practically, most of the above would fit comfortably under the category of Web3 - or Web 3.0, the new generation of technologies that will harness the World Wide Web.
The aspirations for these different technologies, and the companies that harness them, are often ambitious in themselves. However, the potential to combine multiple technologies to create new ways of doing things will, sooner or later, transform the digital world as we know it. Some would argue, even how we know and deal with the physical world.
What's driving the variety of metaverse-related technologies forwards is that they all have their own distinct uses and momentum, that is not strictly tied to the success of the metaverse concept as a whole. For example, virtual reality is going to keep developing and becoming more ubiquitous, even if all VR systems are not interoperable. Cryptocurrencies are going to continue to grow, even if they are not universally accepted across all platforms. Likewise digital twins and other technologies important to industry, are hot topics because of the overwhelming need of enterprises to find ways of deriving value from Big Data and the Internet of Things (IoT).
Dubai has moved fast to identify opportunities in this growing metaverse technology and services sector, and define policy that will be attractive to its key players.
This week, His Highness Sheikh Hamdan Bin Mohammed Bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of Dubai Executive Council revealed the first Dubai Metaverse Strategy. The news comes just two months after the Ruler of Dubai announced the formation of the emirate's metaverse committee, and only five months after the introduction of Dubai's Virtual Asset Law.
Regardless of your feelings about the metaverse, one can't help but be impressed by the speed of Dubai government policy-making here.
Dubai has often surprised the world with bold new initiatives that would simply be stuck in government debate, review committees and legal quandaries for years in most other countries. Over the past decade, many governments around the world have increased their efforts to try to develop ways to create policy faster, in order to keep pace with innovations and new technology trends. Dubai is now becoming a leader in the way it crafts policy at digital speed, aligning the development of economic strategy with its process for creating legal frameworks, government administration and supporting programmes.
The introduction of the Virtual Assets Law in February and the formation of a Virtual Assets Regulatory Authority (VARA) in March, have already received an ethusiastic response from cryptocurrency and blockchain companies worldwide. In fact, almost all of the early traction from Dubai's metaverse initiative is in the crypto and blockchain sector.
Among the first companies to announce licences from VARA include: the world's largest cryptocurrency exchange Binance, global cryptocurrency platforms Crypto.com and FTX, Seychelles-headquartered crypto exchanges Huobi and OKX, cryptocurrency derivatives exchange Bybit, Singapore fintech venture capital firm Fintonia Group, and Bahrain's Sharia-compliant crypto assets trading platform CoinMena.
Many of these crypto companies are planning to establish operations in the UAE for the long term. Bybit and crypto hedge fund Three Arrows Capital, have both announced plans to establish global headquarters in Dubai. Whereas, Crypto.com will open a regional HQ. Decentralised precious metals tokenisation platform Aurus Markets will establish a MENA and South East Asia (SEA) HQ in Dubai. Binance, on the other hand, is expected to spread its operations across Abu Dhabi and Dubai and has been hiring aggressively for UAE-based staff.
Meanwhile this week, another big global cryptocurrency exchange, Kraken, announced a partnership with Rakbank (National Bank of Ras Al Khaimah), though which UAE investors will be able to trade virtual assets in local currency (the UAE dirham). And the crypto announcements are just going to keep on coming!
Less visibile, but also growing is the new wave of companies bringing virtual reality and extended reality solutions and platforms. These include tech giants such as Google, IBM and Microsoft, bringing global technology for digital twins and extended reality to the region; Dubai's well established digital development sector companies pivoting to Web3; and new ventures positioning themselves as 'metaverse' companies.
Looking at the way cryptocurrency companies seem to be queing up to establish themselves in Dubai, it's clear to see that the government's metaverse strategy is going to bring some immediate economic beneifts.
The Dubai Metaverse Strategy aims to increase the number of blockchain and metaverse companies in the UAE by five times over five years, and support more than 40,000 new jobs by 2030. Overall, the government expect's the metaverse to add some $4 billion to Dubai's economy. Not bad for a hypothetical virtual world, eh?
Find out more about this story:
See my Linkedin post for a Dubai metaverse timeline.
Read the Dubai Metaverse Strategy announcement.
See Dubai's Virtual Assets Law.
Essential crypto / blockchain news and comment:
Cointelegraph (Arabic).
BlockByBlock (GCC blockchain newsletter).