The UAE has pushed the envelope when it comes to payment systems within their free trade zone, the KIKLABB. Which could further allow the country to continue to polish its reputation as a major global business hub. More than just using a crypto platform, the UAE has a national strategy in place for blockchain itself— which could see the thriving nation thrust itself into the future, and save billions of dollars with the newest implementation of blockchain technology and cryptocurrency remittance systems in government transactions.
This is largely because cryptocurrencies, in and of themselves, are a borderless form of currency, that would better facilitate cross-border transactions without compounding fees related to exchange rates and centralized transactions. Moreover, the move surely paves the way for other nations that have been pressing for better crypto legislation in free trade areas.
Why Crypto Platforms in Free Trade Zones Are Relevant
While most look towards crypto platforms to acquire currencies like Bitcoin as a highly speculative asset, one that could reasonably be seen to show some incredibly comfortable returns; that’s not exactly what cryptocurrencies were built for. While this paradigm of day trading and HODLing worked wonders to garner public appeal, the true mastery behind digital currencies was to create a payment and financial system that was not only protected from manipulation but also allowed for highly accessible and cheaper trade. Something that the coins are quickly rebounding back towards.
With big names in online payment systems, like Visa, MasterCard, and PayPal creating better scaffolding for crypto payment fundamentals, few governmental bodies have fully gotten on board with using cryptocurrencies as payment systems. With next to none recognizing them as legal tender. Instead regulating them like assets. With free trade areas recognizing the global power of cryptocurrencies as actual currencies, using them to pay fees for licensing and visas, aids these digital currencies in truly reaching their full potential.
The UAEs latest news coupled with the continued work on DeFi platforms— utilized largely by the Ethereum network— means that cryptocurrencies are finally undergoing an early renaissance, where they are being utilized in ways which they were designed, as opposed to hollow signifiers of gains.
It’s Not Just Bitcoin
The UAE has also added in their landmark move to accept crypto payments, both ethereum and tether payments in addition to bitcoin. While it comes as no surprise that ether, the token behind the second most famous crypto platform and currency network Ethereum, is being utilized— tether is still considered a lesser-known altcoin for many. Despite it being around since 2014, the stablecoins has been associated with a number of controversies including allegations of market manipulation, missing funds, and false claims.
Despite its checked past, Tether is still a contender in the top ten altcoins, as it was built specifically to “tether” its price to the US dollar. Keeping its valuation stable around the value of the US greenback. This makes it an ideal borderless currency, particularly when doing overseas business with the United States. Which the UAE undoubtedly plans to do. Because the token’s valuation is close to that of the US dollar, it also makes it more useful crypto when dealing in microtransactions, or transactions less than the equivalent of about $100. Something that big hitter like Bitcoin, Ether, and even Litecoin, can’t really do.
Bolstering a Bullish Outlook for Crypto
No matter which crypto is being used in these types of free trade market transactions, many investors believe that it will have a bullishly positive effect on the entire crypto space. Particularly as any government-backed crypto usage also means favorable legislation to follow. With better legislation, as well as governments unwittingly providing transactional legitimacy for digital currency, cryptos platforms across the board could reasonably expect to see much higher rates of general adaptive practices. Where governments, businesses, and the public at large become more comfortable with the ease and efficiency of using cryptocurrencies to conduct everyday purchases and remittances.
Something that cryptocurrencies have been looking for since their advent and dispersal. Specifically, in lesser-known Stablecoins and Privacy coin markets. With better blockchain usage systems and rules, trust in cryptocurrencies should bolster. As many crypto platform users already know, when it comes to cross-border transactions, there are few things better tailored to fit than crypto themselves. However, because of a slow grind to public adoption, financial tools and ease of use with microtransactions have been largely prohibitive for widespread adoption. Specifically, for lesser-known altcoins.
However, with better practices, more popular use cases, and easy-to-use infrastructure continuing to emerge, it’s unlikely that crypto will ever return to its humble asset class once it has broken fully into the financial sector. While cash and centralized banks are unlikely to take a back seat to crypto any time soon, the emergence of crypto payments that are backed by governments could soon become a standard when it comes to simplifying and streamlining online payments.