Multinational bitcoin exchange igot will today launch the first bitcoin exchange in the United Arab Emirates (UAE), to capitalize on the unique opportunity posed by the market.
The Australia-based company's founder Rick Day told CoinDesk the new exchange will operate with a Commercial Brokerage License, approved by the local government. It has also secured local banking partners for direct deposits and withdrawals in UAE dirhams (AED).
Igot has hired a small team for business development and customer support for its Dubai office.
Day added that igot will continue to offer the same flat 1% trading fee to all its customers worldwide, with no additional fees for deposits or withdrawals in either bitcoin or fiat currencies.
The exchange is aimed more at consumers than professional traders, with a simple buy-sell interface. However, it recently implemented a feature called 'Future Trade' which functions like limit orders on a more advanced exchange, giving customers the option to set their price and wait for bitcoin's value to rise or fall to that level before executing the trade.
As well as bank access, igot is also working with local payment processors to give users more options in the coming months.
Market for remittances, investment
As well as having a concentration of high net-worth individuals among its citizens, about 60% of the UAE's workforce consists of expat Indian workers, both professional and manual, who often send their money back home.
In fact, foreign citizens make up a staggering 91% of the UAE's population of 9.2 million, with 1 million Indians representing the country's largest overall group.
Day said that, given that India is currently igot's largest market outside Australia, its presence in the UAE puts the company in a very interesting position.
"Our strategy to expand igot is based on a pairing system. India is one of our best performing markets. In terms of trade volumes, I think we're the biggest local exchange there. Indians sent $70bn home in 2012."
Igot will also target UAE's wealthy native population, as well as its institutional investors, all of whom have a diverse investment portfolio. The UAE economy is the second largest in the Arab world.
UAE and bitcoin
For a country now famous as a world hub for capitalism and rapid development, the UAE has seen relatively little action on the bitcoin front.
So far, news has been limited to one pioneering pizzeria and a startup, Umbrellab, which offers payment solutions including bitcoin and was reportedly trying to integrate bitcoin ATM functions into Dubai's existing payment kiosk network.
Igot's Day said forming banking relationships was never easy, but the company was able to use its established banking track record in Australia, New Zealand and India to state its case with UAE bankers.
Headquartered in Adelaide, Australia, igot has always had plans for expansion into the potentially lucrative markets of Asia and the Middle East.
Day said the company had processed more than $25m worth of trades in the seven months since it launched. Users executed over 10,000 trades via the Future Trades feature, a number that spiked during the bitcoin price volatility of the past few weeks.
It also has a $15 friend-referral scheme and has implemented Jumio Inc's BISON ID verification system, which has seen the company's fraud rate drop by 93.29%.
Igot uses the same homepage and interface internationally, but users can connect directly to bank accounts in Australia, India, UAE, Hong Kong, Singapore and New Zealand. There is also the option to use other international bank accounts via the SWIFT network.