Dubai just announced the launch of its own digital currency known as DubaiCoin (DBIX), demonstrating its resolve and ability to rapidly adopt new and innovative technologies.

DubaiCoin was created by UAE –based Arabian Chain Technologies which has an ambitious goal of integrating cryptocurrencies into the region’s trade and finance industries. The new cryptocurrency has so far received a lot of interest and has already gained more than 1,000% from its initial price of $0.17 and is currently trading at $1.13 according to Crypto.com.

Arabian Chain Technologies hopes that the cryptocurrency will soon be used as a medium of exchange for goods and services in Dubai and perhaps the entire UAE in the future. Dubai city will control the supply of DubaiCoin with the help of authorized brokers, thus potentially facilitating price stability. The cryptocurrency is not backed by the UAE’s central bank and is operated on a public blockchain. However, there is a chance that it might shift towards that direction considering that it is intended to replace central bank-backed fiat currency.

Riding on the UAE’s crypto haven status

The UAE is one of the most popular havens for cryptocurrency billionaires thanks to the country’s soft approach to digital currencies. In contrast, some countries like China view cryptocurrencies as a threat to the government’s ability to control the money and thus the economy. The DBIX launch and the UAE’s embrace of cryptocurrencies are arguably a strategic move likely aimed at facilitating a stronger transition to a trade and tourism-based economy.

The electrification agenda means fossil fuels will soon be phased out in favor of renewable energy sources. Countries like the UAE which rely heavily on oil as their main source of wealth might be in trouble unless they come up with more sustainable means of generating wealth and sustaining their economies. Cities like Dubai and Abu Dhabi have rapidly grown thanks to a focus on tourism and commerce.

Crypto haven status provides a unique ability to attract crypto billionaires and millionaires at a time when other countries are pushing more restrictions and anti-crypto laws. In other words, more wealth might pour into the UAE economy from the crypto market in the future. The DubaiCoin rollout might be one of the first major steps towards attracting more wealth from the crypto markets.

DubaiCoin is a challenge to governments across the world

Although DBIX is not a CBDC, its significance should not be understated. The fact that its supply will be controlled by Dubai City means it has received government support. Meanwhile, countries like the U.S are still deciding whether going the route of digital currencies might be a good idea or not. China is already in the process of testing out its digital Yuan.

Governments will soon realize that digital currencies are the future of finance thanks to the notable benefits that they offer over fiat money. DubaiCoin will likely challenge more governments to rapidly develop their own digital currencies. There will likely be an influx of government backed-digital currencies in multiple countries including the U.S, India, and EU countries among others, within the next two years. Such a move will most likely make cryptocurrencies more popular, and encourage more adoption.

Dubai’s new digital currency further enforces the notion that the world is at a tipping point not just for the energy industry but also the financial industry. It also highlights different approaches that countries are taking as far as cryptocurrencies are concerned. Either way, it looks like centralized and decentralized cryptocurrencies are the future of money.