The possibility of adding cryptocurrencies into the portfolios of remittance companies isn't far-fetched, but requires regulatory oversight, a top official of money-transfer services provider Western Union said.
The volatility of cryptocurrencies and lack of globally accepted regulatory standards are hindrances for players in the industry to forge ahead with offerings, Jean Claude Farah, president of Western Union's Emea and Apac operations, said. But once there is consensus on legislation, the transition of cryptocurrencies to the remittance ecosystem will be seamless, he said.
"The moment cryptocurrencies will become, from both a regulatory and volatility perspective, a real currency, it's just a flip of a switch for us to add it to what we offer. You need to make sure regulators are backing them up; the overall ecosystem just won't allow it yet to happen," Mr Farah said at FinTech Abu Dhabi on Wednesday.
The volatility of Bitcoin, the world's largest cryptocurrency, has seen it surge or plunge in double digits. In 2011, it leaped to more than $32 from $2. In 2017, Bitcoin peaked near $20,000. Then, on December 27, it crashed to below $12,000. On Thursday, at 9.36am UAE time, Bitcoin was trading at $57,111.
The remittance ecosystem is big business worldwide, especially in countries with huge expatriate populations. Even as the global economy slowed during the height of the Covid-19 pandemic, inflows to low and middle-income countries hit $540 billion in 2020, a 1.6 per cent year-on-year drop compared to 2019's $548bn, according to the World Bank.
The UAE's remittances market was the second-biggest globally in 2020, behind only the US. Remittances by foreign workers in the Emirates hit $43bn last year, according to data from the World Bank.
The digital channels of remittance firms have been a key factor in maintaining the sector's strength. In June this year, Dubai-based Al Ansari Exchange said it posted a 212 per cent surge in digital transfers. Western Union, Mr Farah said, saw the share of its digital business to its overall operations rise to 25 per cent from around 10 per cent a couple of years ago.
Proponents of cryptocurrencies argue that using digital currencies instead of traditional money can facilitate remittances by removing intermediaries and significantly reducing, if not totally eliminating, fees for sending, an Investopedia study showed.
A major concern is that cryptocurrency transactions can be used for money laundering or other illicit transactions and they don't have a fundamental intrinsic value. Cryptocurrencies are not a unit of account and calling them currencies is a “misnomer”, top economist Nouriel Roubini said at a conference in Dubai last month.
“Cryptocurrencies may have an asset value but based on my definition they are not currencies. That’s a fact,” Mr Roubini, chairman of New York-based consultancy Roubini Macro consultancy and well known for predicting the subprime mortgage crisis in the US and the subsequent 2008 global financial crisis, said.
“If something is volatile [at] 5 to 10 per cent, [it] cannot be a currency. A currency has to have a stable value relative to the price index of goods and services.”
Blockchain – the technology upon which cryptocurrencies are built – are also being trialled by exchange houses for integration in their operations. But for Mr Farah and Adeeb Ahamad, managing director of UAE-based Lulu Financial, it's still not quite there.
"We've seen the enormous amount of results in terms of reducing the costs of operations. The problem is that there is a reduction on one side, but the level of compliance costs go up," Mr Ahamed said. "It needs to be balanced out at some point in time and the balancing will happen by adopting technologies."
"Blockchain can be used in two ways: either to enable remittances or to settle with partners around the world. We tried it but, so far, it wasn't faster nor cheaper. But we need to keep in mind that blockchain is an evolving technology; what did not work yesterday could work today," Mr Farah added.
The companies, however, acknowledge cash is still king. Hasan Al Fardan, chief executive of Dubai-based Al Fardan Exchange, said while its digital remittances grew nine times, more than 90 per cent of its business still happens in its physical branches.
"As long as cash is relevant, it is important to complement that with the physical space. The only way forward for growth is to blend physical and digital channels, or an omni-channel offering. That will be the case in the next five to 10 years at least," Mr Al Fardan said.
FinTech services can also attract those who use informal channels to send money, most notably the hawala system, a fund-transfer service between people using non-bank settlement methods, commonly described as 'money transfer without money movement'.
The moment cryptocurrencies will become, from both a regulatory and volatility perspective, a real currency, it's just a flip of a switch for us to add it to what we offer. The overall ecosystem just won't allow it yet to happen
Jean Claude Farah,
president of Western Union's Emea and Apac operations
The Central Bank of the UAE, which does not recognise cryptocurrencies as legal tender, permits legitimate hawala activity and requires hawala providers to register with the CBUAE to enhance the transparency of financial transactions and strengthen the oversight of money transfers.
"One of the positive outcomes of the pandemic is that the greater need to adopt digital methods forced some of these participants in informal channels to become formal, which means it's good for a lot of the businesses operating in the correct manner," Mr Al Fardan said.
FinTech can enable safer and faster money transfers, and "the more choices you give to customers, the less they will use informal methods, which will give them control and good price", Mr Farah added.
Retail gloom
Online grocer Ocado revealed retail sales fell 5.7 per cen in its first quarter as customers switched back to pre-pandemic shopping patterns.
It was a tough comparison from a year earlier, when the UK was in lockdown, but on a two-year basis its retail division, a joint venture with Marks&Spencer, rose 31.7 per cent over the quarter.
The group added that a 15 per cent drop in customer basket size offset an 11.6. per cent rise in the number of customer transactions.
Voy!%20Voy!%20Voy!
%3Cp%3E%3Cstrong%3EDirector%3A%3C%2Fstrong%3E%20Omar%20Hilal%3Cbr%3E%3Cstrong%3EStars%3A%3C%2Fstrong%3E%20Muhammad%20Farrag%2C%20Bayoumi%20Fouad%2C%20Nelly%20Karim%3Cbr%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%204%2F5%3C%2Fp%3E%0A
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
Citizenship-by-investment programmes
United Kingdom
The UK offers three programmes for residency. The UK Overseas Business Representative Visa lets you open an overseas branch office of your existing company in the country at no extra investment. For the UK Tier 1 Innovator Visa, you are required to invest £50,000 (Dh238,000) into a business. You can also get a UK Tier 1 Investor Visa if you invest £2 million, £5m or £10m (the higher the investment, the sooner you obtain your permanent residency).
All UK residency visas get approved in 90 to 120 days and are valid for 3 years. After 3 years, the applicant can apply for extension of another 2 years. Once they have lived in the UK for a minimum of 6 months every year, they are eligible to apply for permanent residency (called Indefinite Leave to Remain). After one year of ILR, the applicant can apply for UK passport.
The Caribbean
Depending on the country, the investment amount starts from $100,000 (Dh367,250) and can go up to $400,000 in real estate. From the date of purchase, it will take between four to five months to receive a passport.
Portugal
The investment amount ranges from €350,000 to €500,000 (Dh1.5m to Dh2.16m) in real estate. From the date of purchase, it will take a maximum of six months to receive a Golden Visa. Applicants can apply for permanent residency after five years and Portuguese citizenship after six years.
“Among European countries with residency programmes, Portugal has been the most popular because it offers the most cost-effective programme to eventually acquire citizenship of the European Union without ever residing in Portugal,” states Veronica Cotdemiey of Citizenship Invest.
Greece
The real estate investment threshold to acquire residency for Greece is €250,000, making it the cheapest real estate residency visa scheme in Europe. You can apply for residency in four months and citizenship after seven years.
Spain
The real estate investment threshold to acquire residency for Spain is €500,000. You can apply for permanent residency after five years and citizenship after 10 years. It is not necessary to live in Spain to retain and renew the residency visa permit.
Cyprus
Cyprus offers the quickest route to citizenship of a European country in only six months. An investment of €2m in real estate is required, making it the highest priced programme in Europe.
Malta
The Malta citizenship by investment programme is lengthy and investors are required to contribute sums as donations to the Maltese government. The applicant must either contribute at least €650,000 to the National Development & Social Fund. Spouses and children are required to contribute €25,000; unmarried children between 18 and 25 and dependent parents must contribute €50,000 each.
The second step is to make an investment in property of at least €350,000 or enter a property rental contract for at least €16,000 per annum for five years. The third step is to invest at least €150,000 in bonds or shares approved by the Maltese government to be kept for at least five years.
Candidates must commit to a minimum physical presence in Malta before citizenship is granted. While you get residency in two months, you can apply for citizenship after a year.
Egypt
A one-year residency permit can be bought if you purchase property in Egypt worth $100,000. A three-year residency is available for those who invest $200,000 in property, and five years for those who purchase property worth $400,000.
Source: Citizenship Invest and Aqua Properties
Voices: How A Great Singer Can Change Your Life
Nick Coleman
Jonathan Cape
Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
Torque: 390Nm
Price: From Dh126,000
Available: Now
more from Janine di Giovanni
Buy farm-fresh food
The UAE is stepping up its game when it comes to platforms for local farms to show off and sell their produce.
In Dubai, visit Emirati Farmers Souq at The Pointe every Saturday from 8am to 2pm, which has produce from Al Ammar Farm, Omar Al Katri Farm, Hikarivege Vegetables, Rashed Farms and Al Khaleej Honey Trading, among others.
In Sharjah, the Aljada residential community will launch a new outdoor farmers’ market every Friday starting this weekend. Manbat will be held from 3pm to 8pm, and will host 30 farmers, local home-grown entrepreneurs and food stalls from the teams behind Badia Farms; Emirates Hydroponics Farms; Modern Organic Farm; Revolution Real; Astraea Farms; and Al Khaleej Food.
In Abu Dhabi, order farm produce from Food Crowd, an online grocery platform that supplies fresh and organic ingredients directly from farms such as Emirates Bio Farm, TFC, Armela Farms and mother company Al Dahra.
The years Ramadan fell in May
Zakat definitions
Zakat: an Arabic word meaning ‘to cleanse’ or ‘purification’.
Nisab: the minimum amount that a Muslim must have before being obliged to pay zakat. Traditionally, the nisab threshold was 87.48 grams of gold, or 612.36 grams of silver. The monetary value of the nisab therefore varies by current prices and currencies.
Zakat Al Mal: the ‘cleansing’ of wealth, as one of the five pillars of Islam; a spiritual duty for all Muslims meeting the ‘nisab’ wealth criteria in a lunar year, to pay 2.5 per cent of their wealth in alms to the deserving and needy.
Zakat Al Fitr: a donation to charity given during Ramadan, before Eid Al Fitr, in the form of food. Every adult Muslim who possesses food in excess of the needs of themselves and their family must pay two qadahs (an old measure just over 2 kilograms) of flour, wheat, barley or rice from each person in a household, as a minimum.
Killing of Qassem Suleimani
More from Neighbourhood Watch:
Killing of Qassem Suleimani
MATCH INFO
Uefa Champions League, semi-final result:
Liverpool 4-0 Barcelona
Liverpool win 4-3 on aggregate
Champions Legaue final: June 1, Madrid
Off-roading in the UAE: How to checklist
Two-step truce
The UN-brokered ceasefire deal for Hodeidah will be implemented in two stages, with the first to be completed before the New Year begins, according to the Arab Coalition supporting the Yemeni government.
By midnight on December 31, the Houthi rebels will have to withdraw from the ports of Hodeidah, Ras Issa and Al Saqef, coalition officials told The National.
The second stage will be the complete withdrawal of all pro-government forces and rebels from Hodeidah city, to be completed by midnight on January 7.
The process is to be overseen by a Redeployment Co-ordination Committee (RCC) comprising UN monitors and representatives of the government and the rebels.
The agreement also calls the deployment of UN-supervised neutral forces in the city and the establishment of humanitarian corridors to ensure distribution of aid across the country.
The%20Emperor%20and%20the%20Elephant
%3Cp%3E%3Cstrong%3EAuthor%3A%20%3C%2Fstrong%3ESam%20Ottewill-Soulsby%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EPublisher%3A%20%3C%2Fstrong%3EPrinceton%20University%20Press%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EPages%3A%20%3C%2Fstrong%3E392%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EAvailable%3A%20%3C%2Fstrong%3EJuly%2011%3C%2Fp%3E%0A
Mohammed bin Zayed Majlis
More on animal trafficking
KILLING OF QASSEM SULEIMANI
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Kill%20
%3Cp%3E%3Cstrong%3EDirector%3A%3C%2Fstrong%3E%20Nikhil%20Nagesh%20Bhat%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3C%2Fstrong%3E%3A%20Lakshya%2C%20Tanya%20Maniktala%2C%20Ashish%20Vidyarthi%2C%20Harsh%20Chhaya%2C%20Raghav%20Juyal%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%204.5%2F5%3Cbr%3E%3C%2Fp%3E%0A
