Many governments in The Middle East are looking to diversify their economies from reliance on petroleum and oil products. With the fuss surrounding clean energy in sustainable development, the activism in the sector is threatening to rob the economies of their livelihood. As a result, many governments in The Middle East, including Abu Dhabi, are exploring new economies in the technology sector specifically in Web3 and blockchain technologies.
The government of Abu Dhabi has subsequently made a $2 Billion investment in the crypto industry to power Web3 and blockchain startups. The city, which is also the capital of The United Arab Emirates(UAE), has rolled out this initiative in an attempt to finance Web3 technologies within its borders and forma special economic zone that is driven by technology therefore diversifying the economy. The capital has already launched its digital assets in its technology ecosystem that goes by the name HUB71. The government has further branded the assets as Hub71+ Digital Assets and has already launched them in the Abu Dhabi Global Market. In its dedication to advance Web3 and decentralized technologies, the $2 Billion capital is set to finance a variety of blockchain startups and make them more accessible to its citizens.
Hub71+ has been described as a smart strategy to open up Abu Dhabi to corporate and government investment partners from within the country and globally. This initiative also offers a regulated ecosystem in the creation of state of the art digital assets that will push the country’s economy towards a positive trajectory. According to reporters from the country, the government hopes to attract investments to the economy from the global crypto market so as to move its digital economy to over 20% in the following 10 years. Currently, the oil economy in the country accounts for more than 80% of its total GDP, Gross Domestic Product. This could spell catastrophe as governments in the globe, in their quest to deal with climate change, are cutting down on consumption of fossil fuels and encouraging adoption of cleaner sources of energy. This could cause a decline in demand of oil products that could reduce the revenue for the oil giant.
To leverage more business opportunities in the web3 sector, The First Abu Dhabi Bank has launched its own initiative called FABRIC to support innovations in the blockchain sector and also create wealth in the metaverse ecosystem. The Hub71 ecosystem has already attracted a number of investors including:
Firms providing digital asset exchange services like Binance, a number of technology providers like Mastercard and Amazon through AWS(Amazon Web Services) to bridge the gap between web2 and web3, digital studios that facilitate and accelerate the creation of digital assets and other decentralized platforms that offer transparency by recording and tracking digital assets to ensure equity in the sharing of assets and the resulting revenue. Other big players in the crypto industry that have made alliances with the Hub71 Ecosystem include polygon, Algorand and Venom Foundation.
The attraction of investors has generated a vast amount of capital for web3 startups to pull from. Apart from the government’s commitment, other sources of funding pledge so far include a $500 million investment from Binance Labs, a $1 Billion venture fund through Venom Foundation and Ton Foundations’ $250 million. A high ranking of Hub71 ecosystem management team has expressed his confidence that decentralization will form a huge part of the future as the government is transitioning to new internet-based technologies.
Author’s Sentiments
Across the world, several industries are responsible for creation of wealth and an aggregation of those industries form the GDPs of many countries. This sectors include agriculture, manufacturing, education, processing, banking, energy and service industries. All this industries are in a bid to get modernized and web3 forms a large part of the solution to this modernization. With STEM(Science Technology Engineering and Mathematics) fields accounting for a bulk of the wealth generated in economies, the blockchain industry has shown potential in the provision of trust and transparency in the way we conduct transactions. Governments and corporates across the world can leverage this technology to provide fast and seamless transactions across all the other industries while at the same time diversifying their economies. Do you think web3 technologies are suited to provide solutions to modernization and diversification of economies? Why? Leave your comment below.
