Welcome to FinTech TV.
I'm Johny Fernandez.
Ongoing conflicts in the Middle East hasn't stopped the digital assets innovation in the UAE.
Abu Dhabi regulators ADGM is pushing through to continue to make the region favorable for the cryptocurrency industry.
Now taking me through all of this is Rachel Pether, Head of Middle East for 3iQ and a FINTECH.TV Contributor.
Rachel, welcome.
Thank you so much, Johnny.
So Rachel, you've been based in the region since 2008.
You've seen a lot.
So walk us through the resilience of Abu Dhabi and ADGM since the war began.
Yes, that's a great question.
You know, people were initially nervous, which is understandable as there was so much noise in social media and the press, but the mood quickly shifted when they realized just how resilient the system is.
Here's the thing, safety is not defined by the absence of threats.
It's defined by how a society prepares for manages them and protects the people who call it home.
And Abu Dhabi really has done an excellent job of protecting the millions of people from around the world that have chosen to build lives here.
And you asked about the business community specifically.
And with regards to ADGM, they've really done everything they can to make sure that the community feels safe and valued and with a sense of togetherness.
So largely it's business as usual here, albeit with less international GPs coming to visit.
ADGM still hosts its monthly networking events, and they also have had ADGM staff going around on office doors, knocking and speaking to people really just to get a sense of how the business community is doing and what their concerns may be.
So Rachel, talk to us about the impact on the digital asset ecosystem specifically.
Yes.
So, you know, when you talk about digital assets, this encompasses an entire market.
It's not just Bitcoin, it's not just cryptocurrencies.
It's an entire technology stack and financial ecosystem.
And the UAE recognizes this, and they know it's not about the latest crypto craze, but how the future of capital markets can be transformed.
Therefore, the war in the Middle East really has had little impact on the UAE's approach, whether that's from a regulatory standpoint or an ecosystem-driven one.
They remain fully committed to regulating digital assets, whether that's through the ADGM in Abu Dhabi or Dubai's VARA.
And ADGM is almost 10.
Years now into its, uh, full spectrum framework for virtual assets activities, and that hasn't been slowing down.
You know, we're still seeing digital asset firms set up here.
We're still seeing specific crypto meetups taking place, and it really is still thriving on the ground in ADGM specifically.
So we know that the global market there has been ahead of the curve on the crypto environment and I know that certain assets have also received their global license there.
So has the war in the Middle East changed the conversation around digital assets in the region at all, either as a safe haven or as a risk?
Not so much, no, because it is, you know, when you look at it as this entire market of, of possibilities, it's not just Bitcoin.
So while money may be, you know, moving into Bitcoin as a safe haven or whether it's moving out, Because it's deemed a risky asset, that hasn't had a direct impact on the ecosystem here.
So it is still a very proactive approach towards digital assets and the ecosystem that's being built.
So, I would say no, the effect thus far has been quite minimal.
And Rachel, the UAE entered the world's top 10 goods exporters last year, and non-global GDP is growing.
How does the digital asset ecosystem fit into the broader story for Abu Dhabi?
That's a great question.
Digital assets are very much a focus area, and this is prevalent through the various government initiatives that are taking place.
And they're not just initiatives.
They're really being staffed by people on the ground with experience to ensure that they deliver to plan.
So as just one example of this, you had the Abu Dhabi Department of Economic Development and the Abu Dhabi Investment Office.
Announced the feeder cluster, which was a few months ago, which highlights the importance of fintech, insurance, digital assets, and alternative assets to Abu Dhabi.
So in the next 20 years, specifically to your question on looking at the economic diversification, the clusters projected to contribute more than an additional 50 billion dirhams of GDP to Abu Dhabi generate 1000 new highly skilled jobs and attract at least 17 billion dirhams in investment.
So the government recognizes that this development of economic infrastructure will further attract investors, startups, and entrepreneurs in the fintech and digital asset space, and it really wants to hold this description that it has as the capital of capital, and digital assets are a key part of that.
And Rachel, you recently launched a multi-strategy digital asset fund and in partnership with a large regional wealth fund there, and you're also expanding the team in Abu Dhabi.
So in the middle of a regional conflict, why is this the right moment to lean in rather than pull back?
That is an excellent question.
And the truth is 3IQ has always taken a long-term view, and we put resources into strategic areas where we have high conviction.
What's happening in the Middle East is a short-term stress which is very natural in both life and markets, but it does not affect a long-term conviction on the region.
As you mentioned, we have sovereign support, we have large investors in the region, we have local partners, we have boots on the ground, and we're building.
And when you see firsthand, like I have, how a situation that might have paralyzed many countries is being managed with calmness and composure and discipline, building now in Abu Dhabi is a logical choice for us.
It's a no-brainer really.
We A lot happening right now in the Middle East.
Rachel, thank you so much for your time and thank you for joining us again today.
Thank you so much Jenny, pleasure to be here.
