Amid the explosive performance of cryptocurrencies this year – with Bitcoin surpassing the $100,000 cap last week – investors are bracing for what appears to be a wild ride in 2025.
Eric Trump was greeted with boos and screams when he took the stage at the Bitcoin MENA conference in Abu Dhabi in December and promised his father would be “the most pro-crypto president in the history of the world.” ‘America’.
The event coincided with the UAE Central Bank’s announcement that it would issue AE Coin, a so-called stablecoin that will be subject to government regulation to ensure its reliability as a digital currency.
After opening the year at $44,204, Bitcoin soared more than 130%, reaching an all-time high of $107,778 on Tuesday – before slipping yesterday to $94,569 and illustrating the unpredictability of the crypto.
In an interview with THE CircuitTim Popplewell, owner and CEO of Dubai-based Scintilla Network, talks about his investment firm’s crypto strategy, the critical role of regulation in building trust, and how the Gulf is ready to open the next chapter of digital innovation.
Where do you think the UAE is going when it comes to crypto?
One of the key aspects of cryptocurrencies and digital assets is regulation, and it is crucial. Generally speaking, there have been less rosy stories in recent years where people have paid a heavy price, including prison sentences.
The UAE, and the Middle East more generally, has played a fantastic role in taking the lead. They went from having little or no framework to creating authorities like VARA – the Virtual Asset Regulatory Authority – here in Dubai, which is truly world-leading. And I don’t think it’s just me saying that from Dubai. I travel enough to know that this is a widely held opinion in the industry regarding regulation in this area.
Strong regulation leads to bigger players. Once the major players realize it is safe to operate here, they begin to move in. You saw it at (the Bitcoin MENA event). The caliber of international players coming to this region is precisely what you want to attract. Regardless of your political views, asking Eric Trump to talk about crypto is a significant endorsement. Bitcoin MENA is the first event of its kind in the region and for its debut it attracted a person of this stature. This says a lot about the importance of this space in the region.
When it comes to trends, it is quite inevitable that digital assets and currencies will be the future. This month alone we have seen leaders from Russia, China, the United States, Europe, Britain and others make statements in support of cryptocurrencies, digital assets, currencies digital central banks or stable coins. The direction is clear: nothing can stop it.
You also have influential figures like Michael Saylor, BlackRock’s Larry Fink, and many others supporting this movement. The trajectory is inevitable; it’s just a question of what form it will take.
How is digital currency used here in the MENA region?
The MENA region started late, but is now progressing very quickly. One example is the use of central bank digital currencies (CBDCs). This is an area where the Middle East region has really taken a lead. A CBDC is a digital currency issued by central banks. In this region, for large oil transactions, CBDCs help eliminate middlemen, reduce fees and speed up transaction times. Another key advantage is that once a transaction takes place, it cannot be undone or disappear: it is immutable. There is no way this will go away. It is impossible for funds to disappear.
CBDCs also help legitimize commerce in the region. A few years ago, there was still skepticism about the Middle East’s ability to play a significant role in global finance. Today, digital currencies are helping to change this perception. For example, during Abu Dhabi Finance Week, the slogan was “The capital of capital”, and no one questions it anymore. I think digital currencies have played a role in this.
What is happening in the UAE regarding digital currency, especially with the recent stablecoin announcement?
At one end of the spectrum, you have central bank digital currencies (CBDCs). This is essentially the digital version of what central banks currently do when they print money, with the full support of the government. At the other end, you have cryptocurrencies, which are not backed by anything tangible, but only market sentiment. In the middle, you have stablecoins. The idea behind a stablecoin is that it is backed by real assets. For example, the recently announced AE Coin, a new stablecoin for the UAE, is backed by dirhams and other assets. If you buy a stablecoin worth one dirham, it is fully backed by an equivalent dirham in reserve, ensuring its stability and security.
Can we predict what will happen in the next 5 to 10 years?
When it comes to major cryptocurrencies, I think their growth is somewhat inevitable. Far be it from me to make a price prediction, but if you were to ask yourself whether Bitcoin, for example, will be higher in five years than it is today, I would say it’s almost inevitable. I really don’t see any reason why this shouldn’t happen.
The real fascination lies in the interaction between CBDCs, stablecoins and cryptocurrencies over the next five years. How these entities interact will be key. If you look at CBDCs, on the one hand, they offer benefits such as reduced costs and transaction times. On the other hand, they raise concerns about government surveillance and tracking how people spend their money. It’s a two-sided story, and I don’t know how it will play out, but it will certainly be fascinating to watch.
Stablecoins, once again, seem inevitable. They clearly represent the way of the future, and I think there is no doubt about that. Cryptocurrencies, however, are more complex. Right now there are millions of them and I think we will see a split. The largest cryptocurrencies that can be traded in regulated spaces will become stronger because people trust them. They won’t face pump and dump schemes or other risks that put their money at risk. Then there is the speculative side of the “Wild West”: meme coins and unregulated cryptocurrencies. They will continue to exist outside of regulation, but good luck to anyone investing in these areas. They won’t disappear entirely, but the space will divide: regulated cryptocurrencies will attract most players, while unregulated cryptocurrencies will remain high risk.
How do you advise your clients to ensure the security of their crypto investments?
We are in an interesting position because we are regulated by VARA and have been incubated within a global law firm. So we saw it a few years ago: the Wild West phase would eventually end and regulation would become the only way for people like you to feel comfortable investing their hard-earned money in this space, whether as an investment or as a way to pay the bills.
This ties in with what I mentioned earlier about the importance of regulated players. For example, we are regulated for exchange services. This means that when you put your money with a regulated provider like us, you can be sure it is safe. We must follow VARA regulations, which allow us to do certain things but also prevent us from engaging in others. That’s where this space is heading.
On the other hand, if you invest your money in a coin just because an influencer or KOL (Key Opinion Leader) thinks it’s funny or trendy, well, good luck. These coins are unregulated and, unfortunately, when things go wrong – and it’s really a matter of ‘when’ not ‘if’ – it’s a case of ‘buyer beware’. .
I think we’re going to see a clear shift towards quality, and that quality will revolve around regulated providers.
