The Maldives are keen to abandon their dependence on tourism, diversify its economy and warmly embrace blockchain technology to offset national debt.
The South Asian country recently signed a deal with Dubai-based MBS Global Investments, building a $8.8 billion blockchain hub in the region. The agreement will fund the Dubai-based family office to establish a blockchain and digital asset hub.
MBS Global Investments has important financial resources and an extensive network to support transactions, with over $45 billion in assets under management (AUM).
A closer look at the details reveals a five-year timeline for building a Web3 hub for the Maldives. The International Financial Centre was baptized, and the hub was built in the capital, Male, and occupy an impressive 830,000 square meters.
The Maldives are paying attention to a long list of benefits of incoming blockchain hubs, viewing its construction as a real opportunity to diversify the local economy beyond tourism.
With revenues from commercial fishing and foreign subsidies declining, the Maldives are turning digital and injecting capital into the local economy. The hub employs up to 16,000 residents, up to 4% of local residents, and could have ripple effects.
Apart from large employment opportunities, the Maldives are targeting a surge in foreign direct investment related to incoming Web3 hubs. Designed to operate as a financial free trade zone, the country is developing strategies to attract international digital asset service providers to establish operations in the new hub.
The Maldives government offers low taxes, seamless registration and licensing, and many incentives to attract global service providers. Once completed, the hub expects revenues of more than $1 billion each year.
With Maldives’ total gross domestic product (GDP) below $8 billion, the incoming digital asset hub has become an important part of the local economy. Already, the country has allocated revenue from the hub to offset the current chunks of approximately $8.2 billion in government bonds.
Maldives’ ambitions to move to Web3 and becoming a local leader are not easy. Currently, Maldives has no traction in Web3, except for Estonia’s previous memorandum of understanding (MOU) to investigate the viability of blockchain in public sector services.
The Maldives must fight the control of Hong Kong and Singapore, the region’s first movers in Web3 and digital assets. Hong Kong launched a blockchain incubator for banks and introduced tax cuts on digital currency to maintain its major position.
Shanghai has established itself as China’s blockchain hub
Elsewhere, China’s Shanghai city has launched a blockchain assessment centre in its quest to become a regional leader in emerging technologies.
The new assessment centre, which will provide a set of services to companies based in DLT in Shanghai and mainland China, is a joint effort by Shanghai’s budding blockchain valley and the China Electronic Standards Institute (CESI), a certified blockchain organization.
The first unparalleled blockchain hub provides uniform standards and technical assessments to Web3 service providers in the region. Apart from uniformity, the hub is expected to attract new players to Shanghai’s fledgling digital economy, with the Jingien region receiving a chunk of new market entrants.
“Jingyan actively positions itself as a hub for blockchain innovation,” said a government official. “The centre will strengthen the local ecosystem and support high-quality economic growth.”
Web3 companies have many incentives to turn to Shanghai as their new hub for their business. The area is primarily home to Blockchain Valley and houses nearly 150 blockchain companies within the 120,000 square metre facility.
Furthermore, the presence of government-supported blockchain institutions will steal the ropes to new market participants. The sector is stacked with the Shanghai Blockchain Association, the Blockchain Technology Research Institute, and the Shanghai Digital Governance Institute, which is operated by the cluster.
In 2023, Shanghai announced its two-year plan for blockchain development through three strategies. Heavy capital injections and clear planning put the region on a map, with several real-world blockchain applications documenting mainstream adoption.
The blockchain-based smart parking system merged with a mobile app for public services in Shanghai, earning stellar results within a year.
Shanghai is moving towards a robust digital transformation, tapping blockchain and other emerging technologies to lead prices. Significant investment in metaverse and inappropriate tokens (NFTS) is expected to speed up the tourism and culture sector.
Meanwhile, the region is warming to central bank digital currency (CBDC) to accommodate rapid changes in the financial sector. Enthusiasm for collaboration, Shanghai expanded its blockchain initiative to Hong Kong and Singapore, achieving a pace of innovation in the region.
Watch: Use blockchain technology for data integrity
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