In January, Qatar rolled out its third National Development Strategy with a focus on economic diversification given the dependency of its economy on oil and gas. Financial services is a crucial part of this diversification bid, and fintech is seen as an industry that can attract foreign investment.
With that in mind, in January, the Qatari fintech startup KARTY raised US$2 million in seed funding from local investors. In addition to the seed funding, KARTY has received other capital from state-owned entities such as the Qatar Foundation, Qatar Development Bank, Qatar FinTech Hub, the Islamic bank Masraf Al Rayan and Visa. KARTY’s e-wallet will offer instant peer-to-peer money transfers to users and provide tools to help them track their spending patterns, the company said in a news release.
With regards to Bahrain, it recorded a record US$1.7 billion in investments in 2023, driven by the financial services sector, which surpassed oil and gas as the largest contributor to the nation’s economy at 17.5% of GDP. Additionally, Bahrain FinTech Bay (BFB) signed a memorandum of understanding with the Qatar Financial Center Authority in March that outlines support policies for fintech startups active in both countries. BFB also recently established partnerships with Fintech Australia and Fintech Japan.
Meanwhile, while global investment in fintech firms decreased 48% year-on-year to US$51.2 billion in 2023, the UAE defied that trend. Its funding jumped 92% to US$1.3 billion across 54 deals, according to UK fintech industry body Innovate Finance. A key part of the UAE’s strategy is a step-by-step embrace of digital assets – a segment in which it is not just a regional leader but also globally. Some of the global financial sector firms stepping up their related presence in the UAE include Standard Chartered Bank, Franklin Templeton and Mastercard.
With that in mind, in April Singapore-based digital asset exchange Crypto.com received full operational approval from Dubai’s Virtual Assets Regulatory Authority (VARA) for its local entity. According to the company, this “marks a first for a global crypto operator to be operational with fiat in the UAE.”
Coinbase, the US’s Paxos, Nomura’s Laser Digital and Circle, the operator of the $28 billion US stablecoin, have also set up shop in the UAE.