As the digital asset market is making its way through Arab markets, the (United Arab Emirates) UAE has tried desperately to recruit cryptocurrency companies to call Dubai their Middle Eastern home. Despite its efforts, it seems to be losing to its tiny, little known neighbor, Bahrain.
Binance, one of the world’s largest and heavily trafficked crypto exchange platforms, recently got the green light to take the steps to become a fully regulated, centralized crypto exchange in Bahrain; a huge win for the UAE’s biggest crypto hub threat.
Bahrain is an archipelago nation of 83 islands, 33 of them being man-made. It’s a cash rich country with lax finance laws and a legacy crypto financial infrastructure. This combination may provide a haven for crypto companies who are trying to host business outside of heavily regulated western markets.
In a chat with CNN, one crypto CEO praised the country as a potential landing spot for the Arab crypto hub.Â
“Unlike the UAE, [Bahrain] has banking regulation for crypto in place, and that is why crypto companies in the region are setting up there,” said Talal Tabbaa, the CEO of CoinMENA, an exchange licensed by the Central Bank of Bahrain (CBB) told CNN.
As a resident of the UAE, Tabbaa spoke on his home country’s lack of organzation when it comes to creating a crypto infrastructure and guideline for operation in the country’s financial system.
“If banking [in the UAE] was sorted, then Dubai could be the number one destination for crypto,” said Tabbaa.
The CBB allows digital assets as an official method of payment. They also allow banks to use crypto exchanges so that their account holders can withdraw and deposit their money simply. Unlike other countries, the responsibilities of establishing a crypto market is up to the banking system in Bahrain, not securities regulators. El Salvador, the country who has hedged all bets on Bitcoin, is currently the only nation to recognize the digital asset as a legal tender.Â
Bahrain’s financial sector makes up 17% of GDP outside of oil. After creating crypto processes in banking back in 2019, they set themselves apart from other nations around the Gulf that were looking to push their cities as digital asset friendly.
Countries around the world have reacted to crypto’s emergence on their financial markets differently. China banned all crypto currency transactions, the UKÂ banned Binance’s operations in their country, and the US has been rumored to come out with overhauling regulations on a wild-west style market in the states.Â
The Ukrainian government voted to legalize the use of digital assets on Wednesday, as the future of their fiat-based economy is in question pending the intentions of over 100K Russian troops at their borders. The ruling passed without abstention.
The country has had a murky past with crypto, primarily mining, for years. With much debate back and forth about the legality, environmental ethics, and government regulation surrounding bitcoin mining in Ukraine’s recent history, the political climate in the country looks to have sparked a desire to give the economy and its citizens every chance of financial survival should a foreign superpower take over their country.
Should the Russians invade, Ukrainian citizens may turn to digital assets in order to purchase the goods they need. Digital assets have been used as a mechanism to preserve the personal assets of millions of displaced citizens across war-torn areas like Afghanistan, Libya, Syria, and Palestine.
In the skirmishes that have taken place with Russian-backed separatists, some reports even claim that the fighting is being partially funded to the tune of $500K by crowdfunded bitcoin.
The tie between political conflicts in Ukraine and the global digital asset market is yet to be known. The legitimacy and practicality of the institution as a truly ‘decentralized’ form of finance is facing its biggest test as of yet.
Venmo sent out an email to users on Wednesday announcing changes to the way they structure fees around crypto transactions. Beginning at the end of March, PayPal, the operator of Venmo, will charge flat fees for crypto trades.
“This change is part of our ongoing commitment to provide transparency, ease of understanding and clarity to our customers,” a PayPal spokesperson said via email to Barrons. “The changes will be effective for both PayPal and Venmo customers on March 21, 2022.”
According to the email, the company’s new fees are based on dollars, not percentages for transactions less than $200.01. For transactions between $1.00 and $4.99, the new fee would be 49 cents. For transactions between $5.00 and $24.99, the fee is 99 cents. For orders between $25.00 and $74.99 the fee jumps to $1.99.
The highest flat fee transaction on Venmo is a whopping $2.49 for transactions that fall between $200.01 and $1,000. Purchase amounts that fall between $200.01 and $1,000 and anything above that will be hit with a percentage-based fee at 1.8% and 1.5%, respectively.
Venmo has been trying to operate with crypto in mind for some time. Venmo users have autonomy to make crypto trades and transactions on a limited basis. Users are limited at $20,000 a week in crypto transactions with a cap on $50,000 in a twelve month period. Venmo does not allow users to directly send crypto currencies to each other without first converting them into USD.
As the company has been making moves in determining crypto’s role in their business lately, PayPal may be looking to use Venmo as its digital asset-arm as the crypto payments space continues to develop.
In a recent chat with Bloomberg, Uber CEO Dara Khosrowshahi said that his company would accept crypto payments in the future, but expressed hesitancy because of the environmental impact that comes with Bitcoin mining. Noting that there is legitimate value of certain digital assets, Khosrowshahi said that its the environmental side effects on top of the cost of exchanging currencies that are causing the world’s largest rideshare app hesitancy in accepting them.
“I think right now what we see with Bitcoin and some of the other cryptos is that they are quite valuable as a store of value,” Khosrowshahi told Bloomberg. “The exchange mechanism is expensive, it’s not great for the environment. As the exchange mechanism becomes less expensive, becomes more environmentally friendly, I think you will see us lean into crypto a little bit more.”
The process of Bitcoin mining has been under scrutiny lately. New York City mayor Eric Adams, who took his first paycheck as mayor in Bitcoin, has voiced his concerns about the environmental impact of digital assets. Washington has also followed in Adams’ footsteps, as just last week they launched a formal investigation into the true impacts of crypto mining on the environment.
Tesla also stopped taking Bitcoin last year in one of the first corporate halts of accepting the currency because of its environmental impact. Just like Uber, Tesla’s Techno-king Elon Musk said the company will start again in the future, presumably when the environmental impacts are less substantial.
Apparently, top-brass at Uber is talking about crypto currency a lot. Khosrowshahi told Bloomberg that conversations around accepting crypto, particularly bitcoin, were happening “all the time.”
