We are only a few months away from 2022, and the financial markets in the UAE are taking an early claim for word of the year. If you take many business pages, participate in the investment market, or even follow the latest updates from us at AIX Investment Group, you will see all have an opinion about digital assets and how it’s already making way into 2022 and beyond, especially in the UAE.
Adding to this pattern, leading institutional investors and wealth managers in the UAE consistently increase their exposure to digital assets significantly. Among them, the majority of the investors are also planning to promote this digital asset class as a sustainable wealth management strategy.
Moreover, despite the recent correction in the crypto market, there tends to be a steady and ever-increasing appetite for the digital asset class among professional investors in the UAE. They are also taking a constructive long-term view into this as a wealth management strategy.
It is believed that demand, adoption, and favourable regulatory frameworks are the three major market drivers that have persuaded this strategic wealth management direction for investors in the UAE.
Demand And Adoption For Digital Assets
With the increasing free time resulting from lockdowns, and the advancement of technology in the UAE laying the groundwork to transform into a digital financial sector, UAE residents are now finding the “digital asset space” as an exciting investment opportunity, which has spiked up the demand for digital assets in the Emirates. Many people have also openly admitted their willingness to educate themselves more about the digital asset space for wealth management before investing.
The UAE residents have also stopped steering away from digital assets nowadays. Instead, widespread adoption of digital assets is settling in with speculation to witness tokenization across multiple sectors on a massive scale. The speculation uproots as companies are hoping to leverage the benefits of blockchain technology to reduce costs, strengthen security, save time and increase the transparency and integrity of processes when it comes to wealth management.
Another underlying cause that promotes digital asset adoption comes from the ever-growing public interest. One best evidence for this can be observed by looking at PayPal – a US-based online payment getaway. PayPal recently announced that it would allow users to buy stores and conduct transactions with mainstream digital currencies. This news has increased public awareness of the concept of digital assets. It has done a great deal in promoting their acceptance among the UAE residents, who are increasingly keen about paying digitally and whose expectations for e-commerce payments have skyrocketed recently.
Favourable Regulatory Frameworks
The regulatory updates on digital assets approved by the Securities and Commodities Authority in October 2020 turned out as the most stable market drivers that persuaded investors to promote digital assets as a wealth management strategy. The update in specific has strengthened the reliability of digital assets for financial market players, be it an investment company or other prominent financial institutions. The legislation of ownership of digital assets and wallets has left investors in a protected investment market with a superior level of security, confidence, and legislation compared to the rest of the world, thereby favoring the plan of investors to promote digital assets as a wealth management strategy in the UAE.
