Lately there’s been a growing level of interest in the Middle East as a global trading hub, with a number of investment banks, trading firms and other financial market participants expanding their presence in the region.
There’s a number of factors that have been driving this growth, not least of which is the recent price volatility seen in energy and foreign exchange rates, which according to many industry analysts, is likely to continue well into 2022. And in the global financial markets, price volatility equates to trading opportunities.
But price volatility is not the only factor stimulating interest in the region. Securities exchanges across the Middle East are taking steps to improve liquidity in their markets and open them up to a wider group of participants. For example, Bahrain Bourse and The Abu Dhabi Securities Exchange (ADX) recently signed a partnership agreement around greater cross-border co-operation. Both exchanges are looking to enhance liquidity on their respective markets, with ADX publicly stating that forging partnerships with global exchanges is a key part of the exchanges strategy to develop its capital markets.
Another interesting trend is the growth of real-time payments in the Middle East. According to recent research from McKinsey, the payments landscape in the Middle East is approaching an inflection point, as the entry of new local, regional, and global payment providers, together with government and regulatory initiatives, are bringing about rapid change. Additionally, SWIFT, the world’s leading provider of secure financial messaging services, has announced its intention to release a new version of its platform later this year that will help accommodate faster digital payments, something that will no doubt be of particular interest to banks operating in the region.
And we shouldn’t ignore the growing momentum around cryptocurrencies and digital assets in the Middle East. In June 2021, the Dubai Nasdaq Exchange listed its Bitcoin Fund, the first cryptocurrency listing in the region. More recently, Dubai-based cryptocurrency exchange BitOasis announced that it had raised $30 million in its latest funding round. And in November, Ripple, the leading provider of enterprise blockchain and crypto solutions for cross-border payments, announced the launch of a new platform in the Middle East, On-Demand Liquidity (ODL), designed to bring instant, low-cost remittances to the area, starting with the United Arab Emirates (UAE).
As we discussed in a recent blog on the topic, investment firms are increasingly including digital assets in their investment portfolios, and service providers are looking at how they can provide safe and secure access to the markets. And with such a progressive financial regulatory environment, the Middle East is becoming a key market for crypto players.
With international financial institutions looking to do more business in the region, local securities exchanges becoming more international with the growth of digital payments, and the rise of crypto and digital assets, there’s now an unprecedented demand for fast, reliable, secure connectivity into and out of the Middle East.
This is where we can help. Not only do we have a large financial connected community in the Middle East, including buy side, sell side and trading venues, but we also provide access to over 400 financial applications providers globally, covering front, middle and back-office requirements. We also provide unparalleled connectivity, in terms of speed, bandwidth, security, reliability, and access to the appropriate endpoints. Security is of course a key concern for financial institutions, particularly from a payments perspective, and in this regard, BT Radianz offers a secure, closed community that offers end-to-end security and encryption between all parties.
Find out more about BT Radianz in the Middle East by getting in touch with your account manager.