Open Banking Can Be a Game-Changer for UAE’s Crypto Adoption
- The Middle East is one of the fastest growing crypto markets in the world, making up 7% of the global trading volumes.
- Open Banking can address the hurdles of crypto adoption.
- Most importantly, Open Banking can enhance the current lacking banking rails.
Following the announcement from Dubai and Abu Dhabi’s regulatory authorities that govern virtual assets and cryptocurrencies, crypto players from across the globe have launched in the vibrant and fast-growing Middle East crypto market.
This has made the Middle East one of the fastest growing crypto markets in the world, making up 7% of the global trading volumes, according to ChainAnalysis. A recent survey has also shown that 33% of UAE residents say they have invested in crypto.
In addition, data from YouGov shows that 67% of UAE consumers have an interest in investing in crypto in the next five years.
However, the ecosystem will need to overcome several challenges before it can build on the interest displayed by consumers in the region.
The most staggering hurdle that will need to be addressed is the friction with on-ramping into the crypto ecosystem. Fortunately, “Open Banking” can reduce this level of friction and subsequently increase the adoption of crypto.
Firstly, Open Banking will enable a seamless experience for crypto investors by combining open banking protocols with industry-standard APIs. With this coupling, consumers would only need to provide authentication only once in their crypto journey.
Secondly, Open Banking removes the need for traditional payment rails such as manual bank transfers or card payments. There is normally a latency associated with this process and higher fees for the user.
Next, using Open Banking APIs, a customer will be able to easily speed up the activation process and comply with regulatory requirements.
Lastly, crypto adoption will add to the ease of payments. The underlying blockchain technology will enable smoother verification, as well as cross-validate customer accounts a lot easier.