The world is gradually becoming more comfortable with digital assets, particularly cryptocurrencies. The popularity and general adoption of cryptocurrencies can be gauged from their increasing acceptance at the exchange level and as a payment method.
As the number of people in the UAE who own and trade in cryptocurrency is steadily increasing, several sectors — including real estate, hospitality, and travel – have started accepting cryptocurrencies as payment.
Is it legal to purchase with cryptocurrency in the UAE?
My Menu, a leading digital menu platform operating in more than 3500 restaurants and 450+ hotels across 70+ countries, recently announced that it would allow guests to settle their bills with cryptocurrency.
“Purchasing with bitcoin is legal in the UAE. We employ a third-party crypto payment gateway with the relevant approvals,” Abhishek Bose, My Menu CEO and co-founder, told TRENDS.
He said that the number of restaurants or hotels accepting cryptocurrency as a payment method in the UAE is now close to ten, but that since the launch of this feature, they have received numerous inquiries, including from a few popular hotels.
Bose added that his firm accepts all major cryptocurrencies, including Bitcoin, Ethereum, USD Coin, Dogecoin, Litecoin, Dai, and Bitcoin Cash, and that hotels and restaurants may begin accepting by simply clicking on the ‘Enable Cryptocurrency Payment’ option.
“We accept cryptocurrency on their behalf and process the payout in local currency. We also accept the risk of the crypto value fluctuation,” he said.
Klaus Pigorsch, Managing Director of Tower Links Golf Course and one of the early adaptors of My Menu and Crypto payments, said that more than 30 percent of their guests own some form of crypto.
“We cater to many international golfers, some of whom are interested in cryptocurrency; thus, the option to accept crypto as payment has been very well received by our guests.” We believe they will be motivated to use it for making regular purchases, and we hope that allowing crypto payments would make our destination more appealing to them,” he added.
Have a Coffee, Pay by Crypto
The Dubai-based café Bake N More is now one of the first cafés in the UAE that accepts cryptocurrency as payment.
Mohammad Al Hammadi, the owner of Bake n More, told TRENDS that purchasing cryptocurrency in the UAE is not illegal. There is no prohibition on crypto assets or trading in them, he said.
“There are currently no such restrictions on cryptocurrencies. However, as a payment method, that is something still the government is getting into,” Al Hammadi added.
According to Al Hammadi, his company is currently using a leading software system for F&B providers that does the conversion accordingly as it is linked to the price charts. So, for instance, if a cup of coffee costs Dh5, the system divides it by the chart rate, we can assume 3.68, and calculates the price based on that will be 1.35 UST.”
UST or TerraUSD is the Terra blockchain’s decentralized and algorithmic stable coin. Its value is pegged at 1:1 to the US dollar.
“We are currently accepting six main cryptos such as Dodge, Shiba, and USDT, but this does not prevent us from adding more because there is always a new trendy coin in the crypto world,” he added.
The contemporary café’s open-source payment platform is handled by Mixin Network, which allows customers to pay for their purchases with Bitcoin, Ethereum, Tether and three other major cryptocurrencies. In addition, all existing payment methods like cash, cards, and online payments are accepted.
Al Hammadi pointed out that paying in cryptocurrency, particularly with overseas visitors, is less expensive because the conversation rate from a credit card from a foreign bank to a local bank in the UAE is significantly greater than the conversation rate in buying cryptocurrency. For example, Russians and Ukrainians are flocking to the café to buy with cryptocurrency because they have some restrictions on transferring funds, so they are simply paying with cryptocurrency.
40 percent of young consumers plan to use crypto
In its Demystifying Crypto: Shedding light on the adoption of digital currencies for payments in 2022 report, Checkout.com recently highlighted the increasingly positive trends in the adoption of an appetite for using digital currencies for e-commerce.
In the UAE, over 54 percent of 18-35-year-old consumers either hold or plan to have crypto assets in the next 12 months.
This increased consumer openness to cryptocurrency is driven by a broader appetite for more convenient, safer payment methods. That is then matched by more merchants and third parties providing the underlying infrastructure to support those methods.
As a result, crypto already has a material impact on merchants and the market overall. More than $2.5 billion worth of crypto payments were made through Visa’s crypto-backed card in the first fiscal quarter of 2022 alone. And those merchants that embraced cryptocurrency payments experienced net-new growth, with 82 percent saying those options allowed them to attract new customers and reach new demographics rapidly.
The Checkout.com report also found that 70 percent of the global merchants surveyed believe that the speed with which crypto payments can be made and settled has the potential to revolutionize their business models – with over 80 percent of those merchants with existing crypto payment options saying it was easier to pay than using fiat currencies.
Bose believes that consumers in the UAE will ultimately be willing to pay for services or items with cryptocurrencies. Still, it will take some time because changing consumer behavior does not happen quickly.
“Dubai’s government measures will help it become more mainstream.” “Dubai has always been at the forefront of adopting new technology. As a proud Dubai-based firm, we can tell you that more and more businesses in Dubai will be adopting crypto very soon,” he added.
According to Al Hammadi, the UAE market is mainly young and tech-savvy. “We are seeing a tremendous amount of interest and influence in this market.” It’s only becoming more considerable, and we’re witnessing a significant trend: restaurants and hotels are all looking at it because they finally think this is the future. It’s a more convenient way of payment.
He went on to remark that his café is a work in progress. It is a crypto hub or a meeting place for like-minded people to chat, share ideas and opinions, hold crypto events, and teach each other about the blockchain.