Dubai launches initiative to store crypto-commodities
purchase additional coins, or sell, at any time they wish. “There has been an increasing trend in investing on cryptocurrencies in the last few years. The most popular way to buy and sell cryptocurrencies today is through an online exchange, where investors are susceptible to not just financial risks but also face threats from cyber criminals,” Vinay Datta, founder and chief executive officer of ThinkAhoy.com, said.
He said the idea of safeguarding individual blocks of crypto-commodities offline in a cold storage with safety levels as that of gold assures that an investor is protected and builds a layer of trust on the system.
“Considering that the economy of the UAE is booming and that there are strict laws and methods in place to safeguard an investor, we could see a definite rise in cryptocommodity investments. In the long run, this will also stabilise cryptocurrencies as a channel of investment, which will in turn aid the flow of investments into the UAE once regulated,” Datta explained.
The company’s announcement came as the regulator of Abu Dhabi’s international financial centre said on Sunday that it could create rules for exchanges handling virtual currencies, in a sign that authorities in the UAE may allow trade in cryptocurrencies in near future.
Ksenia Kiseleva, operations manager, Regal RA DMCC — subsidiary of Regal Assets — explained that mobile wallets are no more considered secure as these can be hacked because the private key is held in a device, which regularly connects to the web, as well as having the private key generated in such a device.
“In deep cold storage, the private key is generated offline. We have a niche product, our solution is not for people who are dealing with small amounts, or are active in trading. Our solutions are for institutions or long term asset holders, similar to storing gold bullion,” added Kiseleva.
Deepak Machado, a blockchain/ Bitcoin evangelist, said that it is a welcome sign, that Regal RA has received a licence to trade cryptocurrencies like Bitcoin and Ethereum, among others. However, what is not clear is what do they mean by licence to store cryptocurrencies in the vault! Do I have to handover my private keys? If that is the case, I would take this news with a pinch of salt! I’d be more comfortable storing my Bitcoins or cryptocurrencies on hardware wallets like Trezor or Ledger Nano S. Keeping your cryptocurrencies on an exchange is also quite risky.
“I would like to make this very clear to anyone holding or planning on purchasing cryptocurrencies ‘keep your private keys to yourself!’ If you handover your private keys to anyone, you are no more owner of your cryptocurrencies. It is like handing over your ATM card and pin to a third party. Trust no one with your private keys.”
— sandhya@khaleejtimes.com