The emerging use of cryptocurrencies in the Middle East
Cryptocurrencies are digital assets represented in the form of tokens which are designed to work as a medium of exchange and which employ sophisticated cryptography to secure and validate the transfer of value.
The ‘crypto’ in ‘cryptocurrency’ refers to cryptography – the practice and study of techniques for secure communication in the presence of third party ‘adversaries’. Accordingly, cryptocurrencies are cryptographically secure in that, while they are theoretically able to be broken, it is infeasible to do so by any known practical means.
There are approximately 2.5 billion individuals with access to the internet around the world and, as cryptocurrencies know no borders, they can be used internationally without incurring expensive transfer and currency exchange fees.
This year, Davidson & Co represented and acted for the Seller in transferring ownership of a portfolio of transferable cryptographic blockchain-based digital information units with an approximate valuation of GBP 50,000,000. The transaction took place over a period of 2 months coupled with a corporate restructuring which resulted in an offshore corporate vehicle owning these crypto assets.
Whilst the UAE is still in the process of establishing formal regulations to govern the operation and trade of crypto assets, jurisdictions such as Saudi Arabia and Bahrain are testing the usage of certain blockchain technology and are exploring the concept of trading in crypto currencies.
Reach out to us for a confidential discussion on any cryptocurrency matters and to find out how we can help.
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