Peaq and Pulsar Group Launch UAE Machine Economy Free Zone

Peaq, a layer-1 blockchain, and the Pulsar Group have established a dedicated sandbox in the United Arab Emirates (UAE) to explore the integration of robotics and artificial intelligence (AI) within a decentralized economy. This initiative, known as the Machine Economy Free Zone, is located in Dubai and aims to advance decentralized, machine economy-specific use cases by combining regulation, infrastructure, and investment.

The free zone provides a controlled environment for developers, businesses, and government stakeholders to test and develop machine economy applications, including decentralized physical infrastructure (DePIN) networks. Max Thake, co-founder of peaq, described the free zone as a "human-centric economy where autonomous robots, machines, and devices create value, earn, and trade." This initiative is designed to attract builders in the DePIN and machine economy industries, offering a more comprehensive approach compared to other economic free zones that tend to be more general.

The Machine Economy Free Zone is a collaborative effort between peaq and Pulsar Group, an Abu Dhabi-based advisory firm specializing in tech and digital economy industries. Thake highlighted several projects working with Emirati enterprises, including community-powered air quality monitoring through wearable devices, hyperlocal weather forecasting, a virtual power plant made up of community-owned devices that support grid flexibility, and the use of smartphones to measure local noise pollution.

DePINs, once a niche blockchain use case, are gaining mainstream attention. The market for DePINs is expected to reach significant heights by 2028, driven by advances in blockchain technology and artificial intelligence. The UAE sandbox enables comprehensive development and testing of machine tokenization applications, which reward token holders with a share of the revenue generated by specific machine activities. For instance, an autonomous robo-cafe that sells coffee and processes transactions digitally can report this data onchain for transparency, and tokenizing it could mean rewarding token holders for each cup the robot sells.

Tokenization also supports the free zone’s Universal Basic Ownership (UBO) system, which directs wealth generated by robots and autonomous agents to individuals displaced from those jobs. Thake noted that while the concept is still in its early stages, the Machine Economy Free Zone in the UAE is the ideal testbed for such innovations. The UAE has become a key hub for tokenization, with Dubai’s Virtual Asset Regulatory Authority (VARA) updating its framework for bringing real-world assets (RWAs) onchain. This has led to rapid growth in tokenized asset activity, particularly in areas like Dubai, where blockchain-based real estate transactions have reached significant levels. The Dubai Land Department, the Dubai Future Foundation, and the Central Bank of the United Arab Emirates have launched the region’s first licensed tokenized real estate project, further solidifying the UAE's position as a leader in this emerging field.