Cryptocurrencies will replace bullion one day, says IBC chairman Khurram Shroff

Khurram Shroff
Khurram Shroff is the chairman of the IBC group, with an estimated one million Bitcoins
Image Credit: Supplied

Dubai: In recent weeks, crypto valuations have witnessed a steady rise, as Bitcoin urged to historic all-time highs. In contrast, traditional fiat currencies and bullion markets continue to face pandemic-induced, inflationary headwinds. These developments are reshaping notions surrounding the long-term viability of digital currencies. In particular they have emerged as a preferred hedge against inflation – a position long held by precious metals like gold and silver.

Decentralized cryptocurrencies such as Bitcoin and Ethereum are increasingly finding takers among institutional investors as well, by virtue of their inherent deflationary characteristics. In recent weeks, several reputed market players have sold their gold-exchange traded funds, in exchange for cryptocurrency stakes. This new-found mainstream traction is a validation of the prescient faith that regional pioneers like Khurram Shroff have had, on the merits of cryptocurrencies, from day one.

Khurram Shroff, the Dubai-based Chairman of the IBC group and one of the region’s largest ‘HODLers’, with an estimated one million Bitcoins, said that the pandemic has exposed long-standing inadequacies in the bullion markets, including the lack of transparency. “Decentralized cryptocurrencies are sparking renewed interest on Wall Street, which seemed improbable just a year ago. Since Bitcoin supply is capped at 21 million, it helped maintain buoyancy in the crypto market, when bullion markets cracked under pressure,” he added.

Besides Bitcoin, Ethereum – the second largest cryptocurrency by market capitalization – and XRP have gained significant value lately. Khurram Shroff, who was instrumental in the launch of Ethereum 2.0, through an investment of $10 million (around 20,000 Ether stakes), said the new staking approach addresses gaps associated with the previous Proof-of-Work mining model of Blockchain. “Unlike the energy-intensive mining model, the Proof-of-Stake model for Ethereum 2.0 doesn’t require large server farms, which makes it more eco-friendly and sustainable. This is the crypto market’s way of showing how capable it is to adapt to the ever-evolving needs of the contemporary world,” Shroff explained.

Emirates at the forefront of Blockchain adoption

The power of decentralized cryptocurrencies lies in their ability to provide a foolproof transaction mechanism and keep verifiable digital records. Farsighted policymakers are now increasingly warming up to such a secure framework, despite early concerns. And Dubai is among the notable patrons of Blockchain-chain based applications. Under the Emirates Blockchain Strategy 2021, the UAE is making headway in the adoption of cryptographic, open-source technologies.

According to Khurram Shroff, the government’s strategic step to move 50 percent of its transactions to Blockchain by next year could have huge implications. “Transparency is the cornerstone of Blockchain. So, its widespread application, at the national level, is conducive to people-centric governance and financial democratization, which will play a pivotal role in accelerating UAE’s transition into a knowledge-based economy,” Shroff added.

As a testament to Shroff’s words, the UAE has indeed ramped up its efforts to implement the strategy, by launching a Blockchain as a Services (BaaS) platform to host use cases for public governance. Even ADGM’s financial services regulatory authority (FSRA) is spearheading the Blockchain revolution, by devising a regulatory framework for crypto transactions. Such local developments are in sync with increasing mainstream acceptance of cryptocurrencies and distributed-consensus models across the globe. And if the current market sentiment is anything to go by, cryptocurrencies look poised to replace traditional investment avenues, which, in all likelihood, could complement the outcomes that the UAE is set to unlock with its comprehensive Blockchain strategy.

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