UAE Sovereign Wealth Fund Giant Interested In Crypto Ecosystem

Mubadala CEO Not a Crypto Skeptic

In a CNBC interview released on Monday (Dec. 13, 2021), Khaldoon Al Mubarak said that the company was investing in the cryptocurrency ecosystem, but did not give further details about the amount that the sovereign wealth fund was allocated for investment. According to Al Mubarak:

“From our perspective, I think we look at the ecosystem around crypto and I think we are investing in that ecosystem, that could be blockchain technology, energy usage, etc.”

Also in the interview, the CEO of the sovereign wealth fund acknowledged that the crypto sector was not ephemeral, considering the exponential growth of the industry’s market capitalization within two years. Al Mubarak also stated that he did not belong to the group of people who were skeptical about the industry. In the CEO’s words:

“First of all, I think it’s real, this is a business that had $200 billion worth of crypto value two years ago, and it’s $2.5 trillion today and growing. So I think many people are skeptics, I do not fall into that category. I think now I see it as real.”

Mubadala is the latest institution to show interest in the crypto sector. The sovereign wealth fund has $243 billion in assets under management (AUM), making it one of the largest wealth funds both in the UAE and globally.

Regulatory Clarity Necessary for Crypto Adoption

Meanwhile, the Mubadala CEO believed that a robust regulatory policy for crypto could make the industry more attractive. For Al Mubarak, a regulated environment will “help transition this asset class into something new.”

With the increasing popularity of cryptocurrencies, such as bitcoin, there have been concerns that this emerging class could disrupt the financial system, while also stating that the sector comes with high risks for investors. Governments and agencies globally are getting serious about regulating the cryptocurrency industry.

Recently, the International Monetary Fund (IMF) released a blog post, emphasizing the importance of a globally coordinated approach to crypto regulations. According to the IMF, a global standard for the regulation of cryptocurrencies will not only manage supposed risks to financial stability, but would reduce “the potential for regulatory arbitrage, or moving activity to jurisdictions with easier requirements.”

An excerpt from the post reads:

“There is an urgent need for cross-border collaboration and cooperation to address the technological, legal, regulatory, and supervisory challenges. Setting up a comprehensive, consistent, and coordinated regulatory approach to crypto is a daunting task. But if we start now, we can achieve the policy goal of maintaining financial stability while benefiting from the benefits that the underlying technological innovations bring.”

An Australian Senator, Andrew Bragg, earlier in December, said that a comprehensive legal framework would bring credibility to the crypto industry. Bragg also stated that there could be regulations introduced within the next 12 months, considering the impressive performance of the sector.

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