Open Banking can be a game-changer for the UAE’s crypto-adoption
- The Middle East is one of the fastest growing crypto markets in the world, accounting for 7% of global trading volumes.
- Open Banking can solve the barriers to crypto adoption.
- Most importantly, Open Banking can improve the current lack of bank rails.
Following the announcement by Dubai and Abu Dhabi’s regulatory authorities, which control virtual assets and cryptocurrencies, cryptocurrencies from around the globe have been launched in the vibrant and fast-growing crypto market in the Middle East.
This has made the Middle East one of the fastest growing crypto markets in the world, accounting for 7% of 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 consumers in the UAE have an interest in investing in crypto over the next five years.
However, the ecosystem must overcome several challenges before it can build on the interest shown by consumers in the region.
The most dizzying obstacle to be solved is the friction of ramping up in the crypto ecosystem. Fortunately, “Open Banking” can reduce this level of friction and subsequently increase the adoption of crypto.
First, Open Banking will enable a seamless experience for crypto investors by combining open banking protocols with industry-standard APIs. With this link, consumers only need to provide authentication once in their cryptocurrency journey.
Second, Open Banking eliminates the need for traditional payment rails such as manual bank transfers or card payments. There is usually a delay 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 legal requirements.
Finally, cryptoadoption will make payments easier. The underlying blockchain technology will enable smoother verification as well as cross-validate customer accounts much more easily.
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