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Middle East Blockchain Development Primed to Lead the Global Industry

A large number of Gulf nations are embracing crypto with open arms as Ethereum explores partnership opportunities…

While we often get to hear about how cryptocurrency adoption is rapidly gaining ground in the West, a number of countries across the Middle East — such as Bahrain, the United Arab Emirates and Saudi Arabia — often tend to get overlooked, despite them having made tremendous strides when it comes to establishing regulatory frameworks that are geared toward the optimal utilization of this burgeoning asset class.

For example, a recent report by Asia Times has revealed that the UAE is one of the few nations in the world where the local government has placed special emphasis on promoting the use of crypto. In this regard, we can see that over the first quarter of 2019, UAE-based blockchain startups were able to raise a total of $210 million — thereby putting the Gulf nation at the apex of the world’s top-10 token sale list, even surpassing countries like the United States and the United Kingdom. What is most surprising is that just over a year ago, the UAE didn’t even make it on this list, thus proving that the onset of this recent crypto wave throughout the Middle East is somewhat of a recent phenomenon. 

In the same breath, it is also worth pointing out that the U.S. has now slid from the number one spot to sixth in the aforementioned crypto funding list, primarily because the nation’s lawmakers have adopted a somewhat confusing stance toward the digital asset industry as a whole. On the subject, Alex Buelau, the CEO of CoinSchedule, tends to agree with the notion that, due to a number of regulatory concerns, more and more companies are moving away from the U.S. in favor of more hospitable regions such as the Cayman Islands, Singapore, etc. 

Related: US a Crypto Exchange Scarecrow — What Needs to Change?

Not only that, Buelau also pointed out that, owing to the heavy-footed approach that countries such as China and India have adopted toward their local crypto markets, it appears as though the Middle East is now primed to lead the way for crypto adoption across Asia.

Lastly, according to reports, the Ethereum Foundation has recently been trying to make its way into the Gulf altcoin market by cooperating with financial experts. If successful, the organization could possibly help push partnerships with other established crypto firms in the coming future.

Notable developments worth highlighting

As many of our regular readers may be well aware of, Bahrain has made a lot of “under the radar,” crypto-friendly moves since the start of 2019 — with the nation’s central banking authority introducing an economic framework earlier this February that covers a host of rules related to the digital asset domain. On this recent development, Khalid Hamad, an executive director at the Central Bank of Bahrain (CBB), was quoted as saying:

“The CBBs introduction of the rules relating to crypto assets are in line with its goal to develop comprehensive rules for the fintech ecosystem supporting Bahrain’s position as a leading financial hub in the Middle East and North Africa”

Additionally, the Bahraini government was also involved in a joint crypto pilot venture along with Saudi Arabia and the UAE so as to help increase local awareness about blockchain technology as well as make cross-border payments between these countries more streamlined and hassle-free.

In a similar vein, Saudi Arabia is another nation that is also making use of blockchain technology to facilitate its international monetary transfers. For example, as per the announcement made by the Saudi British Bank (SABB) at the beginning of this year, the financial institution has partnered with California-based blockchain firm Ripple to launch an instant cross-border transfer service for its clients. Not only that, even the Saudi Arabian Monetary Authority (SAMA) is making use of a blockchain-based remittance system to facilitate transactions between various banks located within Saudi and the UAE.

Blockchain startups are targeting the Gulf elites

Another recent phenomenon that seems to be attracting attention is that established crypto entities are turning to the Middle East in order to acquire investments for their envisioned projects. For example, it recently came to light that the Ethereum Foundation was partnering with finance experts from the Persian Gulf in order to showcase the compatibility of their blockchain ecosystem with existing Islamic rules and regulations — sharia in particular.

This is probably the first time a big-name crypto organization has taken such a step to secure a large-scale investment from the region’s financial elites. On the subject, Ethereum Foundation’s head of special projects, Virgil Griffith, was quoted as saying:

“My job is to keep rolling dice. Probably nothing will happen. But there’s a hypothetical case where say, the Saudi sovereign wealth fund invests, like, a trillion dollars [in Ethereum projects], which would be a real boon. That would be really great.”

Not only that, there are also firms like Houston-based Data Gumbo that have been successful in creating a blockchain-as-a-service (BaaS) platform that is now being used by various offshore drilling firms situated in the Gulf region. Through its Series A equity funding round, Data Gumbo was able to raise a sizeable sum of $6 million from the Saudi Arabian national petroleum and natural gas company Saudi Aramco and leading Norewegian energy operator Equinor.

Also in a conversation with Cointelegraph, Matthew J. Martin, founder and CEO of Blossom Finance, said:

“The DIFC (Dubai International Financial Center) with its FinTech Hive is attracting many interesting ventures. Since DIFC companies are allowed 100% foreign ownership, it’s a solid option for many international teams looking for either their primary jurisdiction, or as a primary base to support operations regionally. The acquisition of Souq by Amazon was also great validation of the exit potential for investors, and this will likely increase the volume of venture capital pouring in. With the strong public sector support for blockchain projects we’re seeing in the UAE, it’s likely that more international teams will chose the DIFC to incorporate.”

It is worth pointing out that there is an overarching issue that the Gulf oil and gas industry is currently facing in the form of data inconsistency. This is because niche measurements related to the weight, speed, delivery time, volume, etc. of crude oil are interpreted differently by various operators, service providers and suppliers. This not only results in tangible work-related delays but also causes large-scale payment disputes among all of the member parties. 

Data Gumbo’s aforementioned platform minimizes such issues through the use of its BaaS network and smart contract technology, as it allows participating firms to obtain automated calculations on their invoice line items in real time. This enables important transactions to take place in a transparent manner. On the future potential of Data Gumbo’s BaaS-enabled platform, the company’s CEO, Andrew Bruce, noted:

“We enabled the first application of blockchain technology in the offshore drilling industry and will continue to break new ground with applications of BaaS to improve the bottom line of companies of all sizes. Blockchain will have a major impact on the oil and gas industry — and all global industries — and we will lead the charge in its broad adoption for sweeping operational improvements.”

More use cases

ADNOC: The Abu Dhabi National Oil Company (ADNOC), which is the UAE’s largest oil firm, recently collaborated with IBM to devise a novel blockchain-based automated system to keep a close eye on the financial values of each transaction taking place between its operating members. Additionally, the new platform has been built atop Hyperledger and makes use of the IBM’s native Cloud computing technology.

S&P Global Platts: The world-renowned energy and commodities information provider released a blog post recently announcing its decision to create a blockchain network that would allow market participants to provide the Fujairah Oil Industry Zone (FOIZ) with weekly inventory oil storage reports in a highly streamlined manner. FOIZ currently lays claim to the title of being the Middle East’s biggest commercial storage region for refined oil products.

NBAD: The National Bank of Abu Dhabi (NBAD) signed an agreement with Ripple back in 2017 in order to make use of the firm’s various blockchain offerings. The entire point of this exercise for NBAD was to streamline its monetary transactions and make international payments more accessible for its customers.

The potential roadblocks

Even though a number of novel blockchain projects have emerged from across the Middle East over the past year or so, various roadblocks that are preventing many Western firms from capitalizing on this untapped market segment still exist. For starters, the issue of shaira compliance is preventing various big-name companies from accessing the $3.4 trillion market simply because their operational protocols do not adhere to existing Islamic law. But it is not as if Gulf nations such as Saudi Arabia, Oman, the UAE are not interested in making use of blockchain tech, as just last year, the crown prince of Dubai has announced that the city was going to deploy a blockchain-based administration system by 2020 that will allow the local government to digitize the ID, tax and registry details of its citizens and will store the data on a blockchain network.

Related: From Qatar to Palestine: How Cryptocurrencies Are Regulated in the Middle East

With that being said, the Islamic banking sector at large is still holding on to its skeptical view of blockchain because most financial institutions operating within the region adhere to certain long-held traditions that are in direct conflict with the way Western banks work. For example, sharia law prohibits the lending of money using a fixed interest rate model (Riba) — a common practice used by many banks across the world. However, since crypto and blockchain makes use of a fractionalized ownership framework, it is possible to make money lending complaint with the Islamic way of doing things. 

In the same way, sharia also prohibits monetary transactions that are ambiguous in nature (i.e., deals that do not have defined legal boundaries). In this regard, smart contracts can be quite useful, as they clearly outline the terms and conditions of a particular exchange beforehand — thereby leaving no scope for future uncertainty.


As the global crypto economy continues to evolve, it seems as though established players such as the Ethereum Foundation and Ripple will continue to try to tap into the Gulf market because of the amazing monetary potential it offers. Cointelegraph recently got in touch with Atif Yaqub — an executive partner at UKP Assets — who is of the belief that, as we move into the future, the Middle East will start playing an ever-increasing role in shaping the digital currency landscape. According to Yaqub:

“As the Gulf nations move to diversify from their oil based economies, there is a huge drive in tech investment. There has been much interest in Blockchain and Crypto companies on the State and private level.”   

Similarly, while elaborating on the topic of how foreign firms are reaching out to Gulf states for ties, partnerships and money, he added:

“The Gulf offers untapped growth opportunities and entry to the wider region. Pursuing comprehensive Shariah certification for a network, like Ethereum has been doing, lifts many barriers to entry. This just expands the use cases and audience.”

Last but not least, with Facebook’s Libra coin all set to enter the altcoin market in the near future, it will be interesting to how crypto adoption spreads throughout the Middle East — especially considering that the social media juggernaut has a little over 265.4 million active users spread across the region.

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Huawei Considering Launch of Blockchain Services in Latin America

Chinese telecommunications hardware giant Huawei is studying the entire Latin American market and considering expanding its operations.

Chinese telecommunications hardware giant Huawei is studying the entire Latin American market and considering expanding its operations, Cointelegraph Brazil reports on June 13.

Per the report, a Huawei executive said at the CIAB Febraban conference on June 11 that it is possible its blockchain-enabled products and services will soon be available on the continent. The executive in question — who asked to remain anonymous — noted:

“Everything will depend on the outcome of our market analysis and in case there is a market demand for blockchain we will make our services available in this area. Today we are focused on storage, 5G and telecommunications.”

The company claimed to have several contracts with the Brazilian government for storage solutions and to be in talks for 5G infrastructure deals. In April last year, Huawei also launched its blockchain-as-a-service offering through its cloud platform, which reportedly allows the creation and management of blockchain applications at low cost.

When asked about the United StatesChina trade war and the possible effects on the company, the executive declared that he is confident that it will be resolved and noted that the only problem that needs solving is access to Google’s Android software licensing. Still, he promised that customers will not be seriously affected by U.S. measures.

The executive also said that he does not know about further cryptocurrency-concerning developments at the company, but believes there are no developments to report at the moment.

As Cointelegraph reported earlier today, blockchain software consortium R3 revealed that it is developing a blockchain platform in Brazil with banks Bradesco, Itau and B3.

Yesterday news broke that CIP, a facilitator of Brazilian banking and financial infrastructure, has officially launched its blockchain ID platform via a partnership with IBM using Hyperledger Fabric.

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Legal & General Partners With Amazon to Use Blockchain for Pension Deals

Amazon partners with insurance agency Legal & General to make a bulk annuities transactions using blockchain technology

Online retail giant Amazon has partnered with United Kingdom-based insurance agency Legal & General to create a blockchain system for managing corporate pension deals, according to a report by Reuters on June 11.

Legal & General will reportedly make use of the Amazon Managed Blockchain for its bulk annuity transactions, which happen when companies transfer their pension schemes to Legal & General for insurance.

According to an article by the Financial Times, companies make bulk annuity transactions to insurers like this so that they are not ultimately responsible for personally paying their employees’ pensions.

CEO of Legal & General Reinsurance Thomas Olunloyo commented on how a blockchain solution is fitting given the longevity of annuities:

“… it allows data and transactions to be signed, recorded and maintained in a permanent and secure nature over the lifetime of these contracts, which can span over 50 years.”

As previously reported by Cointelegraph, Amazon released its managed blockchain service in April through its subsidiary Amazon Web Services. This blockchain-as-a-service (BaaS) allows users to more easily create and maintain blockchains on the Ethereum and Hyperledger networks by automating certain aspects of blockchain management.

According to Rahul Pathak, the general manager of Amazon Managed Blockchain, the service “… takes care of provisioning nodes, setting up the network, managing certificates and security, and scaling the network.”

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Report: Chinese E-Commerce Giant Has Applied for Over 200 Blockchain Patents

The Chinese e-commerce giant has reportedly applied for over 200 patents.

Chinese e-commerce giant has applied for over 200 blockchain patents, according to a report by Securities Daily News on May 20.

The report also notes that major e-commerce competitor Alibaba has applied for 262 blockchain patents, and Chinese internet titans Tencent and Baidu have applied for 80 and 50 such patents, respectively, as recorded by the Intellectual Property Center of China Information and Communication.

According to interpretation of the data provided by Intellectual Property Center of China Information and Communication, was in first place for “global blockchain patent strength,” with Alibaba, Tencent, and Baidu coming it at second, seventh, and fifteenth place, respectively.

The report also notes that China is the global forerunner in blockchain applications. From 2013 to 2018, China filed 4,435 blockchain patent applications, which is 48% of global blockchain patent filings, as per the “Blockchain Patent Situation White Paper (Version 1.0)” published by the official website for China Telecom.

The runner-up in patent numbers was the United States, which purportedly filed for 1,833 blockchain patents in total, occupying the global patent space by 21%.

Securities Daily that, with a breakdown of patent filings by industry, companies accounted for 75% of applicants, vastly outnumbering the quantity filed by research institutions, individuals, and government agencies. Out of this 75%, the report noted that the majority of companies that filed were internet-related.

The Intellectual Property Center of China Information and Communication also notes that intellectual property infringements have been an issue in the past for Chinese blockchain patents, and reportedly advises:

“It is recommended that the government do a good job in industry supervision and supervision and patent quality improvement. Enterprises should raise awareness of intellectual property protection and risk prevention, avoid blind investment in the blockchain field, apply for low-value patents, and avoid future blockchains. There have been a large number of infringement lawsuits in the field.” released a blockchain-as-a-service (BaaS) platform JD Blockchain Open Platform in 2018, which allows organizations to streamline blockchain creation and run smart contracts, as per the Cointelegraph report. has also helped create institutes for blockchain research, such as the Smart City Research Institute and a blockchain research lab.

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Blockchain Firm Raises $6 Mln From Major Energy Companies, Saudi Aramco Subsidiary

Data Gumbo Corp. has raised $6 million from major energy companies, including the venture wing of Saudi Arabian national petroleum and natural gas company Saudi Aramco.

American blockchain startup Data Gumbo Corp. has raised $6 million from major energy companies, including the venture wing of Saudi Arabian national petroleum and natural gas company Saudi Aramco. The news was published by energy-focused news outlet Worldoil on May 8.

In a Series A equity funding round, Data Gumbo ostensibly raised $6 million from companies such as Saudi Aramco Energy Ventures, the venture subsidiary of Saudi Aramco, and Equinor Technology Ventures, the venture subsidiary of Equinor, a Norwegian multinational energy operator. The new investment purportedly brings Data Gumbo’s total funding up to $9.3 million.

The funds will be used for developing Data Gumbo’s commercial blockchain network and adding to the company’s technical, sales, and marketing teams. The investors purportedly expect Data Gumbo’s blockchain-as-a-service platform to improve oil and gas supply chains by eliminating disputes and enabling automated payments, as well decreasing reconciliation times between supply chain counterparts.

Daniel Carter, Senior Investment Director at Saudi Aramco Energy Ventures, said that “distributed ledger technologies have the potential to bring win-win efficiencies between industrial companies and their suppliers.”

Recently, the Russian prime minister welcomed an initiative to use blockchain in agreements over gas supplies by the country’s state-owned gas giant Gazprom. The blockchain-based platform reportedly intends to allow data sharing between all the participants of a certain contract, as well as to improve the security of data.

In March, seven global oil and gas firms, including American industry giants ExxonMobil and Chevron, partnered to form the Oil & Gas Blockchain Consortium. The initiative intends to conduct proofs of concept in order to explore and apply the benefits of blockchain, as well as contribute to global adoption of the tech.

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Starbucks Working With Microsoft for Blockchain-Based Coffee Tracking Platform

U.S.-based coffee chain Starbucks is working with tech giant Microsoft on its blockchain-based coffee tracking initiative.

United States-based coffee chain Starbucks will implement tech giant Microsoft’s Azure Blockchain Service to track coffee production, tech news site GeekWire reports on May 6.

Starbucks first announced its “bean to cup” initiative in 2018, stating that it would work with farmers in Costa Rica, Colombia, and Rwanda to pilot a blockchain-based coffee-tracking system. The system will purportedly allow customers to track the production of their coffee and will open up potential financial opportunities for coffee bean farmers on the backend.

Starbucks further noted that they would open source the pilot program to disseminate their findings.

The two companies presented a number of joint initiatives today at Microsoft’s Build Conference, GeekWire reports. The other projects reportedly include predictive drive-thru ordering and connecting Internet-of-Things (IoT)-enabled equipment at different cafe locations. 

Microsoft’s Azure Blockchain Service was just announced on May 2, as recently reported by Cointelegraph. Azure Blockchain Service is a blockchain-as-a-service (BaaS) platform that currently supports Quorum, the Ethereum-based platform of JPMorgan Chase. The new Microsoft BaaS purports to streamline the use of consortium blockchain networks, from creation to modification.

Earlier this week, details emerged that suggest Starbucks will accept bitcoin (BTC)-based payments following an equity deal with American cryptocurrency trading platform Bakkt. No actual bitcoins will reportedly end up processed by the chain, as the cryptocurrency will be instantly transferred into fiat currency.

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Chinese Regulator Approves First 197 Blockchain Firms, Including Tencent, Alibaba, Baidu

China’s cyberspace administration has released its first list of registered blockchain service providers.

China’s cyberspace administration has released the first list — 197 companies long — of registered blockchain service providers, according to their March 30 notice.

Chinese initiatives by internet giants such as Baidu Blockchain Engine, Alibaba Cloud Blockchain-as-a-Service (BaaS), Tencent BaaS (TBaaS) and the BaaS platform owned by e-commerce giant appear on the list. Financial institutions such as the China Zheshang Bank and Ping An Insurance Company are also included.

Some less-known companies such as blockchain-enabled supply chain management service VeChain and parcel delivery service ParcelX are present on the list as well. The article also notes that no institution or individual is permitted to use blockchain for any commercial purpose.

The Chinese cyberspace administration will reportedly search for other services that should register and “relevant institutions and individuals who have not fulfilled the filing procedures should apply for filing as soon as possible.”

As Cointelegraph reported earlier this week, China is reportedly leading the world in the number of blockchain projects currently underway in the country.

In October last year, Alibaba Cloud, the cloud computing arm of China’s Alibaba Group, announced that it is enhancing its BaaS offering outside China.

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Smart Dubai Endorses Blockchain Platform From Major Local Telecoms Operator

The platform has received the seal of approval from Smart Dubai, the government organization in charge of transforming state-level services by 2021.

The blockchain platform built by one of the United Arab Emirates’ (UAE) two telecoms operators has received an official endorsement from the government as part of the country’s blockchain integration, executives confirmed in a press release on April 3.

Du, formerly known officially as Emirates Integrated Telecommunications Company, created its Blockchain-Platform-as-a-Service (BPaas) to offer cloud-based private blockchain hosting compatible with both Ethereum (ETH) and the Hyperledger Fabric.

Now, the platform has received the seal of approval from Smart Dubai, the government organization in charge of transforming state-level services with the leveraging of disruptive technologies by 2021.

“The Dubai blockchain agenda is an integral strategy for the city’s future and we are proud to be a key enabler for the digitisation of the government,” Farid Faraidooni, du’s deputy CEO of enterprise solutions, commented in the press release. He added:

“By building on top of our BPaaS to support the country’s digital transformation, our blockchain endorsement by the Smart Dubai Office is an important step towards providing smart solutions that create efficiencies for government transactions leading up to 2021.”

The announcement comes the same week as the UAE hosts a dedicated conference on blockchain’s role in the aviation industry. Last month, a similar conference addressed cryptocurrency more directly, with authorities hinting at the need for supportive regulation of the phenomenon.

Smart Dubai, meanwhile, also aims to implement advances such as Internet of Things (IoT) and artificial intelligence (AI) as part of its roadmap.

“The city of Dubai has pioneered blockchain from the onset and continues to be a global leader in providing new and improved ways to implement and set the future roadmap for the evolution of this ground-breaking technology,” Smart Dubai CEO Wesam Lootah added.

Cointelegraph has previously provided a comprehensive summary of Dubai’s blockchain plans.

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Microsoft Japan Partners With Startup to Increase Domestic Blockchain Uptake

Microsoft and LayerX hope to propagate blockchain technology throughout Japan’s domestic market.

The Japanese arm of computer giant Microsoft has partnered with nascent blockchain startup LayerX to “accelerate” uptake of the technology, Cointelegraph Japan reported Nov. 30.

LayerX, which formed in August as a joint venture from news curation app Gunosy and advisory service AnyPay, oversees blockchain integration for enterprise, including areas such as smart contracts and general consulting.

Using Microsoft’s Azure Blockchain-as-a-Service (BaaS) solution, the companies will seek to promote the technology further in the domestic economy.

“We will support the introduction process in its entirety, even down to technical support of finished implementations,” an accompanying press release stated, adding:

“Both companies will work toward realization of transformation of people’s lives and working practices by promoting the implementation of blockchain technology in various industries.”

Earlier this month, Microsoft released its cloud-based Azure blockchain development kit, which executives said would initially focus on three areas: “connecting interfaces, integrating data and systems, and deploying smart contracts and blockchain networks.”

The Japan move forms the latest in the country’s ever-increasing activity in both the blockchain and cryptocurrency sphere, with multiple entities involved in promoting the technology among consumers.

Two Japanese cryptocurrency exchanges, Coincheck and Zaif, meanwhile continue to recover from hacks in January and September this year that saw losses totaling almost $600 million.