Dubai faces concerns over testing blockchain technology

Rage Review : As an emerging technology, blockchain can connect Dubai's government and enterprises and create a new era of public-private cooperation. The Future Accelerator project recently launched by the Dubai government has selected 30 companies and invested tens of millions of dollars to test the technologies of these companies. This has undoubtedly attracted top technology companies from all over the world and helped to build Dubai into a global technology center. However, some financial institutions are afraid that blockchain will damage the future profitability of institutions, and some people believe that the government should invest funds in more basic areas such as telecommunications, education reform, improving productivity and judicial reform.

Translation: Nicole

In the heart of Dubai’s financial district, there’s an office whose form and function are perfectly matched. With its sleek curves, it’s the first office in the region to be built with a 3D printer, and it houses an agency that’s harnessing the potential of emerging 21st-century technologies. From autonomous driving to blockchain, the Dubai Future Foundation is seeking new technologies to make the UAE a future tech hub, not just a sun-soaking and shopping paradise. This could do more than encourage fintech companies to make Dubai their headquarters: technology meets national needs. In terms of connecting government and business, the city is committed to building a new era of public-private partnerships through experimentation.

For example, DFF’s Dubai Future Accelerator program has selected 30 companies and given them three months of development time and tens of millions of dollars in venture capital to test their technologies with government authorities. Participants include Hyperloop, a supersonic transportation system, and ConsenSys, which builds developer tools and blockchain (shared database system) applications.

Organisers hope the collaboration will tackle challenges set by various government agencies, including: seeking automated transport networks to reduce congestion by 20 per cent; buildings that harness the power of nature to cut electricity use by two-thirds; and “complete behavioural, genetic and biological systems” that could make identifying and tracking criminals 10 times more efficient.

Al Aleeli

Al Aleeli, Executive Director of Dubai Future Foundation, said:

“They say a picture is worth a thousand words, but a prototype is worth thousands of pictures.”

“There is no better way to bring technology to life than to test it. As a 21st century nation, our goal is to make Dubai a world-class hub for testing new technology applications.”

The accelerator program fits in with another DFF-founded project, the Global Blockchain Council, a public-private initiative that brings together government departments, local businesses and international startups. The council was launched in Dubai earlier this year to promote the development of the technology in real life by testing new business models.

The result was announced this month: the committee has launched seven pilot projects. The Dubai government also intends to integrate blockchain into the government operating system. The goal of these pilot projects is to develop blockchain, reduce paperwork, and integrate the technology into the process of checking documents and identity information.

The Dubai Multi Commodities Centre, a government-owned free zone, is working with GBC to use blockchain to verify and transfer Kimberley certificates (issued to confirm diamonds are not from conflict zones). This year, DMCC chief Ahmed Sultan bin Sulayem also became chairman of the 81 national Kimberley Process organisations.

UAE telecommunications provider du is piloting an electronic medical records solution. The manual process of transferring medical records between hospitals and patients is cumbersome and prone to errors. Du said that by using blockchain as a protocol to share sensitive information, it can effectively prevent tampering and save providers costs.

Osman Sultan

Osman Sultan, CEO of Du, said:

“Blockchain has extraordinary potential to improve our lives as an electronic medical record application, allowing us to access patients’ medical records securely and in real time while ensuring their integrity.”

Aisha bin Bishr, chairperson of the Smart Dubai Office, a government agency dedicated to expanding the use of technology across the city, said:

“Blockchain is a major component of our strategy.”

One area of ​​government interest is digital currencies such as bitcoin, which can use blockchain to secure transactions. Ola Doudin, founder of BitOasis, a Dubai-based bitcoin wallet and exchange company, said adoption of bitcoin and other digital currencies has risen to 80 percent, moving beyond the narrow world of technology "geeks."

While many people are taking advantage of these “virtually free” (in her words) transfers, banks are still trying to understand blockchain technology, cut operating costs and simplify complex regulatory requirements for better compliance.

Financial institutions have also noted that the presence of digital currencies in money transfer systems could hurt their future profitability.

One of the main ideas of startups like BitOasis is to work with regulators and governments to promote technical knowledge and education. These startups have caused resistance from regulators who are afraid of losing their regulatory power over exchanges. Doudin said:

“Banks are increasingly interested in blockchain technology and they want to learn more, but we are still in the experimental stage.”

The companies involved in the experiment hope that the Dubai government's determination to stick to it will accelerate the transition from idea to reality.

As a regional hub for commerce, trade and tourism, the emirate can extend its business-friendly advantages and crush competitors by leveraging the power of the government.

Some critics in China say the recent obsession with futuristic models stems from a clever gimmick.

They argue that the government should focus on more basic services such as improving telecommunications, making educational changes, increasing productivity and carrying out judicial reforms, including legalizing debt.

But officials say they will change what can be changed, focusing on areas where red tape can be cut to improve the business climate.

Vinay Gupta, a London-based venture capitalist and member of the Global Blockchain Council, said:

“Dubai has a tradition of exploring how the world works and working on it, and this adaptability and vision can theoretically put Dubai ahead of places like London, which face huge bureaucratic obstacles. We are worried about Brexit now, Dubai is worried about blockchain.”

What is blockchain?

Blockchain is a data record architecture that creates a shared ledger that is distributed across networked computers and allows users to instantly verify transactions without going through an intermediary. The network verifies new transactions and when they are approved as legitimate, they are added to the blockchain.

Blockchain technology is often considered to be the underlying ledger of the digital currency Bitcoin, which can be public and allow everyone to add new transactions to the blockchain.

At the same time, many companies are also exploring private chains that are shared with known parties.