Maldives Launches $9 Billion Blockchain Finance Center to Triple GDP
2min read The Maldives is embarking on an ambitious project to develop a $9 billion blockchain finance center, aiming to diversify its economy and reduce its reliance on tourism. The initiative, known as the Maldives International Financial Centre (MIFC), is a collaboration between the Maldivian government and MBS Global Investments, a Dubai-based company. The project, set to be completed over five years in the capital city of Malé, spans 830,000 square meters and is projected to create 16,000 jobs and potentially triple the country's GDP, which is estimated at $7 billion.
The MIFC is envisioned as a multi-purpose digital economy zone, featuring a digital finance and banking district with crypto exchanges, investment funds, and fintech companies. It will also include a blockchain data center with decentralized storage and high-level computing infrastructure, as well as a Web3 startup campus and co-working spaces to foster blockchain entrepreneurship. High-end residential and commercial developments, including flats, hotels, conference facilities, and shopping centers, will be built to attract global talent. Additionally, a freezone similar to those in Dubai will be established, offering 100% foreign ownership, 20-year tax holidays, and long-term residency visas for foreign professionals.
The Maldivian economy is heavily dependent on tourism, which contributes 30% of its GDP, and fisheries, which account for 10%. However, recent challenges such as public debt exceeding 100% of GDP, widening fiscal deficits, and long-term threats to tourism from pandemics and climate change have highlighted the need for economic diversification. The MIFC is seen as a solution to reduce reliance on these sectors by leveraging blockchain and digital finance. The Finance Ministry estimates that the MIFC could generate $1 billion in revenue annually by the end of its fifth year of operation. The government is also expediting the formation of a regulatory sandbox to allow companies to experiment with blockchain services under relaxed legal supervision.
The Maldives' initiative positions it against established crypto hubs in Asia, such as Dubai, Singapore, and Hong Kong. Dubai has made significant strides in crypto development, including digitizing real estate transactions on blockchain and hosting major crypto events. Hong Kong serves as a bridge between Western and Chinese investors, while Singapore offers a clear legal environment and infrastructure for blockchain companies. Despite these competitors, the Maldives hopes that its new investor incentives, tax breaks, and strategic geographic position will attract a share of the Indian Ocean market.
One of the biggest challenges for the Maldives is the lack of local expertise in blockchain. To address this, the Maldives Blockchain Talent Outreach (MBTI) will collaborate with Maldives National University, the Binance Academy, and ConsenSys Academy to train 5000 professionals over five years. The government will also provide long-term visas for foreign blockchain experts. To ensure secure cryptocurrency transactions, RegTech products and blockchain analytics will be used to counter financial crimes. Experts from Binance Research consider the MIFC to be one of the top blockchain projects in the Asia-Pacific region by 2025.
