The metaverse has garnered a lot of publicity recently in Dubai and the wider UAE following the hosting of the World Government Summit 2022, and the Dubai Municipality’s announcement of plans to create a digital twin of Dubai in the metaverse at the event. The digital Dubai, called One Human Reality, will include virtual environments combining elements of virtual and augmented reality, cryptocurrency, video games and social media, with the hope that it will become a marketplace that is worth billions in the next few years.
With the technology for the metaverse developing at pace across the world – and the global market valued at $47.69 billion in 2020 – businesses in Dubai can be at the forefront of this.
What is the metaverse?
There is a lot of hype about the metaverse currently but providing a definition of what it does and what it is for can be more difficult.
The metaverse is a virtual world created with virtual reality that is perpetual – in that it continues to exist even when a user isn’t in it. It also encompasses elements of augmented reality, which is where aspects of the virtual world are seen in the physical world. It also has the potential to be interoperable – meaning you can purchase a virtual item in one platform and use it in another – although most platforms don’t have this functionality right now.
There is a perception among some that it is just for gamers – aspects of the hugely popular online game Fortnite, where a virtual world is created, can be described as ‘metaversal’. However, it has the potential to be much more than that. There are ambitions, in Dubai and elsewhere across the world, to use the metaverse to improve people’s lives and how cities operate. For instance, it can help to boost inclusion in education and healthcare, especially for those who have difficulty accessing public places. Although to achieve this will require the hardware needed to access the metaverse to be available to everyone. The current cost of about AED 1,100 is exclusory for significant numbers of people.
Dubai’s plans for a digital twin city link in with ambitions around the world to create smart cities. Recently Seoul, the capital of South Korea, announced plans to spend $3.3 billion by 2030 to become a metaverse city.
The aim is that, by 2030, people in Seoul can attend government offices from the comfort of their sofa and apply for documents or licences and be assisted by virtual city officials. In addition, utilities including energy and the recycling of wastewater could be managed by artificial intelligence.
Smart cities can do this by using the data it receives – from sensors in Internet of Things enabled devices, video cameras, social media and myriad other sources of information – to learn and improve the lives of its citizens as a result. Data on anything from air quality to traffic flow can be analysed and changes made instantly. For example, if there is an accident on a road, then the smart city can instantly ensure that traffic is routed around the accident.
As this is a rapidly developing medium, with new technological innovations coming online regularly, it is difficult to say with confidence what the metaverse will become in the next few years. But we can say with more certainty that the technology is developing and the potential for it is huge.
The metaverse in the UAE
As mentioned above, the metaverse is developing in Dubai and the UAE, with the plans for One Human Reality concept now being accelerated and the Dubai Municipality’s stated aim of building a digital infrastructure to access the world in a new way.
However, to become reality, it will take investment, not least in the digital infrastructure needed of portals to be built in public spaces.
There are also already metaverses online in Dubai that are trading non-fungible tokens and blockchain in a virtual world. Others are in development and have raised funds from investors as part of that journey.
New Dubai digital laws
But businesses will need to be aware of new digital laws that were recently passed in Dubai, as virtual assets can be traded in the metaverse. Rather like trading on a stock market, digital assets can be bought and sold that have real-world monetary value.
In February, Law No.4 of 2022 on the Regulation of Virtual Assets (DVAL) was passed, and it came into effect on 11 March. The law is the first in Dubai that is specific to virtual assets. It applies across Dubai apart from the Dubai International Financial Centre.
A part of this new law includes plans to establish the Dubai Virtual Assets Regulatory Authority (VARA) to oversee the virtual assets market in Dubai and put in place a set of rules and controls to govern how transactions of these assets are made.
The laws could mean that anyone that wants to engage in virtual assets in Dubai may have to get authorisation from VARA, even if they already have a licence to trade or provide cross-border services. This could present challenges for businesses based in other parts of the UAE that want to provide services to customers in Dubai.
Like many other licences in Dubai, it is expected that any applicant applying for a licence under the DVAL would need to complete an application form and submit a business plan and evidence of how the business is organised as well as the required fees.
Opportunities for entrepreneurs
The market for digital assets is developing, where people can buy and sell digital products for real-world money. This will create opportunities for those who produce digital assets, as well as investors and traders who buy and sell them. The new regulations from the Dubai government will strengthen investor confidence in these.
There is also funding available for metaverse projects in Dubai. Angel investors have been attracted to metaverse startup companies in recent years and several have raised significant sums in funding rounds to aid their development.
As mentioned, there will need to be significant infrastructure development and software and hardware will need to be developed.
With the metaverse, along with smart city technology still emerging, those with innovative technologies could make significant inroads into the market and take a significant stake in it.
This is yet another reason for entrepreneurs to consider basing themselves in Dubai. In recent years, it has become a hub for advanced technology businesses, with leading names in the sector and startups alike attracted to the emirate by its highly developed infrastructure, no-tax regime and governmental incentives.
While currently the technology for the metaverse is limited, the potential is limitless. With smart cities and digital twins being planned as well and increasing amounts of data becoming available and new technology constantly being developed, the next decade could see a revolution in virtual worlds and early adopters could make big profits – and, more importantly, it could make everyone’s lives better..