The Maldives, an archipelagic state in South Asia, is in the process of establishing a $8.8 billion blockchain hub that could potentially help it diversify away from tourism, according to a Sunday report by the Financial Times.
The ambitious project will be financed with the help of MBS Global Investments, a $14 billion family office based in the United Arab Emirates. A joint venture agreement between the Dubai family office and the Maldives was signed earlier today.
The blockchain initiative is expected to be a boon for the Maldives, fixing its overdependence on tourism. It potentially results in a 200% increase in the country's GDP within just four years, creating thousands of jobs.
The Maldives' economy primarily relies on tourism, which accounts for roughly 30% of its entire GDP. The Maldives are famous for their luxurious resorts that attract tourists from around the globe.
The archipelagic state also has a prominent fishing industry, which is responsible for about 10% of the country's GDP. The Maldives is primarily known for yellowfin tuna and skipjack, with the EU, Japan, and Thailand being its key markets.
However, the country is facing significant economic challenges, with its public debt surpassing its GDP, which currently stands at $7 billion. Moreover, it is facing fiscal deficits due to excessive spending.
The recently announced blockchain pivot could potentially help it alleviate the strain. Finance Minister Moosa Zameer told the Financial Times that the $9 billion hub could be a way out of the current difficulties. Notably, the ambitious project could potentially help it avoid a possible default.
Vladislav Sopov