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Ethical and Legal Challenges of NFTs
and the Metaverse in the UAE: A Systematic
Literature Review
Ahmad Alsuwaidi(B) and Irenee Dondjio
Department of Digital Innovation, University of Nicosia, Nicosia, Cyprus
{alsuwaidi.a,dondjio.i}@live.unic.ac.cy
Abstract. The rapid advancement of technology has led to the emergence of Non-
Fungible Tokens (NFTs) and the Metaverse, representing unique digital assets and
a post-reality environment that combines virtual and digital worlds. This review
aims to explore the legal and ethical challenges associated with NFTs and the
Metaverse in the United Arab Emirates (UAE) and to identify opportunities for
the UAE to position itself as a leader in these technologies. A review of 15 research
articles was conducted, focusing on privacy, cybersecurity, regulatory concerns,
and socio-cultural issues related to NFTs and the Metaverse in the UAE. Informa-
tion relevant to the UAE was included, while unrelated data was excluded. The
findings indicate that NFTs and the Metaverse offer significant opportunities for
the UAE to lead in technological innovation. However, substantial legal and ethical
challenges must be addressed to realize these benefits fully. Enhancing the financ-
ing and entrepreneurial ecosystem in the UAE is recommended to foster innovative
applications of NFTs and the Metaverse. Addressing legal and ethical challenges
is crucial to improving citizens’ lives, boosting economic competitiveness, and
driving innovation.
Keywords: Non-Fungible Tokens (NFTs) · Metaverse · Blockchain · United
Arab Emirates (U.A.E)
1 Introduction
NFTs, which are “Non-fungible Tokens,” are digital assets that can be used to represent
intellectual property and physical or digital creative works [1]. Examples include games,
music, digital art, gifs, video clips, and more. In NFTs, ‘non-fungible’ means each token
is a distinct entity representing a single, specific object that cannot be exchanged with
another token. These tokens are composed of digital data in the form of media (images,
videos, and music), with values often calculated based on cryptocurrency [2].
NFTs establish a digital record of ownership and transfer via blockchain technol-
ogy, ensuring that each transaction is recorded and verified through a decentralized
network. This ensures the authenticity and exclusivity of each NFT, preventing repli-
cation or duplication, and offers a dependable and transparent approach to demonstrate
ownership of digital assets [1]. Due to their use of blockchain technology, NFTs have
© The Author(s), under exclusive license to Springer Nature Switzerland AG 2025
M. Themistocleous et al. (Eds.): EMCIS 2024, LNBIP 535, pp. 245–259, 2025.
https://doi.org/10.1007/978-3-031-81322-1_18
246 A. Alsuwaidi and I. Dondjio
recently attracted significant interest, providing verifiable evidence that the NFT owns
the associated item [ 3].
The word Metaverse comes from the Greek prefixes “Meta,” meaning after, and
“Verse,” meaning universe [4]. The Metaverse is a multiuser, perpetual, post-reality
environment that combines digital virtuality and physical reality [4]. It integrates several
emerging technologies to build an economic system using blockchain technology, virtual
reality, and digital twin technology, creating a mirror image of the real world and tightly
integrating the real and virtual worlds into a single identity, social, and economic system.
Recently, the Metaverse has gained global attention due to its realistic needs and
development possibilities. Tech giants like Facebook, Microsoft, Tencent, and NVIDIA
have announced their plans to enter the Metaverse [5]. The concept of the Metaverse is
constantly evolving, with various players adding their unique contributions.
In the dynamic landscape of NFTs and the Metaverse, there has been a noticeable
increase in the purchase, sale, and manufacture of NFTs in the UAE. Three Middle
Eastern NFT markets have raised approximately $10 million in the past three years [6].
Art Dubai, the region’s largest art festival, is dedicated to digital art and NFTs [7]. In
2023, Kuwait’s Gallery Bawa held its inaugural NFT art exhibition. Saudi artist Abdullah
Qandeel claimed to have launched the world’s first Artist-Approved Physical NFT on
June 29 [8]. Lebanese fashion house Elie Saab announced its debut into the Metaverse
with a virtual store setup, offering customers a distinctive experience and staying up to
date with rapid advancements in digital technology. Elie Saab joins a select group of
upscale businesses present in the NFT virtual world [9]. The Dubai Police introduced
the first batch of 150 non-fungible digital assets [8].
The Genesis NFT collection was introduced in March 2022 by the MBC Group,
the largest media company in the Middle East and North Africa, in collaboration with
AFTERMEDIA and ENCORE Strategy, offering more than 200 properties with varying
degrees of scarcity [8]. The UAE aims not only to compete in the Metaverse arena but
also to become the dominant player in the region. Saudi Arabia celebrated its National
Day in the Metaverse for the first time [8]. Their published 5-year Metaverse roadmap
shows the creation of 40,000 virtual jobs contributing to Dubai’s USD 4 billion economy
[8]. Dubai’s metaverse strategy aims to attract over 1,000 metaverse-based companies
in the UAE by 2030 [8].
The Metaverse has also drawn interest as a tool for enhancing higher education in
the UAE [6]. For example, the University of Texas at San Antonio (UTSA) uses a virtual
learning environment called Second Life, allowing students to explore and interact with
virtual representations of real-world settings, leading to increased student engagement
and improved learning outcomes [10]. However, adopting the Metaverse in higher edu-
cation faces challenges, such as accessibility, affordability, and adaptability [11]. Rapid
technological advancements in the Metaverse require constant updates and infrastructure
upgrades, imposing financial constraints on institutions with limited resources [12].
NFTs and the Metaverse also face numerous ethical and legal challenges in the UAE.
Advancements in technology and rapid improvements have led to security problems, such
as authenticity issues [13]. The digital owner signature of each token, making it easy to
link an asset to its owner, significantly reduces the uniqueness and non- fungibility of
NFTs [6]. Additionally, consumers can be tricked into purchasing fake goods such as
Ethical and Legal Challenges of NFTs and the Metaverse in the UAE 247
tickets or artwork [7]. Recognizing and addressing potential challenges associated with
the Metaverse is imperative, including privacy, legality, security, identity, ownership,
accessibility, expense, and technology availability [14].
This review highlights several research gaps that have been overlooked in the current
literature. These gaps include the absence of comprehensive legal frameworks address-
ing the ownership and transfer of digital assets, insufficient studies on the long- term
implications of privacy and data security within the Metaverse, and limited research on
the ethical considerations and societal impacts of widespread NFT adoption. Conse-
quently, the primary objective of this review is to identify the major ethical and legal
challenges associated with NFTs and the Metaverse in the UAE. By addressing these
critical issues, the study aims to contribute to the development of robust regulatory
and ethical frameworks that can support the UAE in becoming a global leader in these
emerging technologies.
The paper begins with a literature review, exploring NFTs, their attributes, opportu-
nities, challenges, and links to blockchain and the Metaverse. The methodology follows,
detailing a systematic review to ensure a comprehensive, unbiased collection of relevant
studies. Key findings are then presented and assessed in the discussion section. Finally,
the conclusion offers insights and recommendations to advance the field.
2 Literature Review
2.1 Non-Fungible Tokens
NFT stands for non-fungible tokens, which came to the horizon in 2014 when Kevin
McCoy created the first NFT, Quantum. NFTs are digital assets such as games, videos,
gifs, music, and digital art, representing tangible or virtual creative works or intellectual
property [15]. In NFT, “non-fungible” refers to the fact that each token is a distinct entity
representing a single, particular item, and cannot be exchanged for another token. These
tokens are composed of digital data in the form of media (images, videos, and music),
whose value may be determined using cryptocurrencies.
NFTs are components of the Ethereum blockchain, but they differ from Ethereum
currencies, which can be exchanged for other assets of a similar kind [16]. NFTs are
generated or “minted” on a blockchain that serves as electronic proof of ownership for a
specific digital asset [17]. When a digital asset is created, it is assigned to a smart contract
as an ownership certificate that is recorded on the blockchain. This process ensures that
the asset cannot be duplicated or deleted and is easily accessible to anyone [3].
2.2 NFTs in Blockchain
NFTs are not merely artworks; they are cryptographic equipment that use blockchain
technology to safeguard and validate a record of the existence and ownership of both
digital and physical goods [18]. Some of the most famous and high-priced NFTs have
been associated with digital artwork. However, the NFT itself is a block on a blockchain
that is intended to be immutably connected to a digital asset, such as artwork [19].
Notably, NFTs have enabled the verification of the “provenance” of underlying assets
248 A. Alsuwaidi and I. Dondjio
by validating information such as who owns certain items, who previously owned or
created that item, and how many copies exist for that item [20].
The first example of NFTs is CryptoKitties (2017), a blockchain game on Ethereum
that allows players to purchase, collect, breed, and sell virtual cats [52]. While the gaming
industry’s adoption has already reached maturity, the production of digital content, such
as music, digital art, or video, is still experimenting with technology. In December
2020, the NFT art market began to grow again, with the NFT volume exceeding USD 2
billion in the first four months of 2021, ten times larger than the entire trading volume in
2020 [21]. The intersection of NFT and blockchain technology has created a paradigm in
various fields, including art, gaming, music, and real estate. As NFTs grow in popularity,
blockchain will continue to be the backbone of the secure and transparent infrastructure
that supports the creation, trading, and ownership of these unique digital assets [22].
2.3 Metaverse
When virtual and physical reality intersect, a collective virtual shared environment
known as the “Metaverse” is generated, where real-time users can communicate with
other users and computer-generated settings in this virtual world. The Metaverse is com-
monly conceptualized as an immersive, three-dimensional environment that surpasses
conventional Internet interactions by enabling users to interact with a persistent net-
worked virtual world [23]. In the modern world, where the demand for digital goods and
services is rising rapidly, computer scientists and researchers have developed concepts
to enhance computer users’ experiences. Three-dimensional virtual worlds are among
the latest developments in the digital world.
The phrase “Metaverse” is frequently used to describe augmented and virtual reality
[24]. Technology that allows for multidimensional interactions with digital things, peo-
ple, and virtual surroundings is the foundation of the Metaverse [4]. The Metaverse is
recognized as an evolving paradigm of the next-generation Internet, following the Web
and mobile Internet revolutions, where users can live as digital natives and experience
an alternative life in virtuality [25]. There are many potential uses for the Metaverse in
public services and government, such as virtual public spaces, remote governance, pub-
lic service delivery, improved government accountability and transparency, increased
social connectivity, better access to information and education, new job opportunities,
improved accessibility for individuals with disabilities, and new forms of creativity and
entertainment [8].
2.4 Challenges of NFTs and Metaverse in the UAE
These fundamental elements for creating metaverse experiences have been around for
a while [8]. However, understanding and addressing the possible obstacles linked to
the Metaverse is imperative. Concerns such as identification, ownership, privacy, legal-
ity, security, accessibility, affordability, and technology availability are among these
challenges [13].
Legal Landscape
The process through which NFTs are created, owned, and transferred may lead to
Ethical and Legal Challenges of NFTs and the Metaverse in the UAE 249
legal issues. NFTs face the same problems as most cryptocurrencies, making regulation
challenging [1]. Key legal issues include:
Regulatory and Legal Issues.: NFTs can cause legal problems due to their creation,
ownership, and transfer, similar to cryptocurrencies. Questions on ownership rights,
intellectual property protection, and contractual duties arise because of the NFT’s unclear
legal position, posing risks to users and investors [26]. Strong security measures and
authentication are essential to prevent money laundering, fraud, or market manipulation
[27]. Regulators must establish transparent rules and structures that protect investors
while encouraging creativity and economic progress [28].
Privacy Issues: As virtual goods investment increases, securing virtual assets becomes
critical. Main challenges include hacking, fraud, and theft [13]. Because NFTs are
recorded on a public blockchain, transaction history and ownership are visible to the
world, which can cause privacy problems for users who do not wish to broadcast their
ownership [1]. The risk of theft or fraud increases as the owner’s identity of high-value
NFTs can be easily determined [29]. Users may prefer to keep some information private
for safety or security reasons [30].
Cybersecurity: Storing NFTs on a blockchain introduces cybersecurity risks.
Blockchain networks, though difficult to hack, are vulnerable to other forms of cyber-
crime [31]. Hackers with access to private keys or smart contracts can steal, transfer, or
destroy the NFTs associated with compromised accounts. Maintaining private keys in a
safe environment is essential for authorizing and authenticating transactions [32].
Market Perceived Value: The value of NFTs is driven by supply and demand and public
opinion more than by economic or technical considerations. Buyers and sellers are at risk
of losing perceived value and market demand [28]. Assessing an NFT’s true worth can be
difficult due to factors like media attention, celebrity endorsements, and cultural trends.
Buyers without specialized market expertise may overpay for NFTs that depreciate or
lose their initial appeal. Similarly, sellers might struggle to set reasonable prices [1].
Intellectual Property Concerns: The rapid expansion of NFTs raises concerns about
intellectual property rights. Creating an NFT without the original creator’s consent poses
significant issues [16]. Ownership and administration of intellectual property rights
become problematic when NFTs are made without necessary permissions or licenses
[33]. The original artist and the NFT’s creator may have competing rights unless a formal
assignment or license agreement indicates otherwise [1].
Ethical Landscape
NFTs raise several moral and societal issues that need to be addressed:
Cultural and Social Issues: NFT-based digital assets with cultural or social significance
can pose ethical challenges. Ownership rights and appropriate remuneration may arise
when NFT transactions occur without the original creators’ or owners’ knowledge [34].
The market can digitize and monetize cultural and creative works, potentially causing
conflicts between commercializing cultural assets and preserving cultural heritage [35].
Some fear NFTs may devalue cultural artifacts by turning them into tradable digital
250 A. Alsuwaidi and I. Dondjio
assets [1]. Addressing these issues is primarily up to users, platforms, and communities
[9].
Ethical Concerns: NFTs can be used to create and trade controversial or offensive assets,
raising ethical questions [1]. The lack of regulation and centralization in the NFT market
means any digital content, including potentially offensive or discriminating items, can
be tokenized and traded without the original artists’ permission [36]. Exploitation is
a significant ethical issue, as personal information, photographs and creative works
belonging to vulnerable individuals or communities may be tokenized and sold without
consent [37].
3 Methodology
This study employs a systematic literature review methodology to explore the ethical
and legal landscape of NFTs and the Metaverse in the UAE [52]. This approach ensures a
comprehensive and unbiased collection of relevant studies, providing a robust foundation
for analyzing the current state of knowledge in this field [38, 39]. The specific steps taken
in the research process are outlined below.
3.1 Search Strategies
A systematic approach was adopted for the literature search, utilizing a variety of aca-
demic databases to ensure a thorough and comprehensive collection of relevant studies
[31]. The search strategies employed are detailed in Table 1.
Table 1. Search strategies.
S.no Search strategy
1 (“NFTs and Metaverse”) AND (NFTs in blockchain Metaverse”) AND
(“Legal aspects of NFTs in UAE”) AND (“Ethical landscape of NFTs”) AND (“Legal
implications of Metaverse”)
(“NFTs in UAE”) AND (“NFTs significance or market in UAE”) AND
2 (“Significance of Metaverse in UAE”) AND (“Legal and Ethical Challenges of NFTs
and Metaverse in UAE”) AND (“Advancement of NFTs in Dubai or Abu Dhabi or Oman
or Middle East or UAE”)
3 (“Challenges of NFTS in UAE”) AND (“UAE and Metaverse or NFTs”)
AND (“NFTS blockchain market in Dubai”) AND (“Metaverse and NFTs in Abu
Dhabi”)
Ethical and Legal Challenges of NFTs and the Metaverse in the UAE 251
3.2 Databases Used
The literature search was conducted across multiple academic databases to ensure a wide
coverage of peer-reviewed journals, conference proceedings, and relevant articles [31].
The following databases were used in the search process:
•Google Scholar: For broad access to academic papers across various disciplines.
•IEEE Xplore: For access to articles and conference papers related to technology and
engineering.
•ScienceDirect: For access to peer-reviewed journals in the fields of science,
technology, and social sciences.
•SpringerLink: For access to academic journals, books, and conference proceedings.
•PubMed: For access to biomedical literature, particularly relevant for health-related
aspects of the Metaverse.
•Emerald Insight: For access to management, information technology, and social
science research.
•Scopus: For comprehensive coverage of scientific journals, books, and conference
proceedings.
A thorough search through the above mentioned databases yielded a total of 1250
papers, with the “Preferred Reporting Items for systematic reviews and Meta-Analyses
(PRISMA)” directing the researchers to identify, filter, and choose the most relevant
material. The articles were imported into “Endnote,” where they were combined, verified,
reassessed, and corrected, and duplicates were removed all at once.
3.3 Inclusion and Exclusion Criteria
To ensure a targeted and relevant approach, inclusion and exclusion criteria were estab-
lished to define the selection process for the literature and case studies reviewed (Moher
et al., 2009). These criteria are shown in Table 2.
A comprehensive manual review of the reference lists from the selected papers was
conducted to ensure a thorough selection process, resulting in the identification and
inclusion of additional relevant articles. Numerous abstracts and titles were examined
to determine their relevance to this investigation. In total, 150 studies were selected for
further review. Their full texts were downloaded, reviewed, and re-evaluated based on the
established inclusion and exclusion criteria. This meticulous approach narrowed down
the findings, and 100 papers that met the inclusion criteria were subjected to quality
assessment using the “Critical Appraisal Skills Programme (CASP).” The majority of
the papers were excluded as they did not meet the inclusion criteria. After a final re-
evaluation, 11 studies were ultimately selected for this systematic review.
3.4 Data Collection and Analysis
Data were collected from the aforementioned academic databases, journals, and industry
reports. The search strategies were designed to capture the most relevant and recent
studies on the ethical and legal aspects of NFTs and the Metaverse in the UAE [39].
Each identified source was reviewed, and relevant data were extracted and analyzed to
identify key themes and insights.
252 A. Alsuwaidi and I. Dondjio
Table 2. Inclusion and Exclusion criteria of the study.
Inclusion criteria Exclusion criteria
Research, case studies and examples were
directly related to the NFTs and Metaverse
articles.
Materials providing up-to-date information
within the last five years have been included.
Research, case studies, and examples not
related to the NFTS and Metaverse are not
included.
Invalid sources that do not reflect the current
state of regulations have not been included.
Information related to the UAE was included. Information not related to the UAE was not
included.
Studies having related keywords to the title were Studies having no relation with keywords to
included in this review. the title were not included in this review.
The systematic approach ensured that the review was comprehensive and unbiased,
covering a wide range of perspectives and research findings [39]. The analysis focused
on identifying recurring themes, gaps in the literature, and potential areas for further
research (Fig. 1).
Fig. 1. PRISMA Flow Chart
Ethical and Legal Challenges of NFTs and the Metaverse in the UAE 253
3.5 Data Extraction and Synthesis
Following the identification of relevant studies, a detailed data extraction process was
conducted. Key information, such as the study objectives, methodologies, findings, and
conclusions, was extracted from each selected article (Tricco et al., 2018). This infor-
mation was then synthesized to provide a comprehensive overview of the current state
of knowledge regarding the ethical and legal implications of NFTs and the Metaverse in
the UAE.
The synthesis involved organizing the extracted data into thematic categories, allow-
ing for a structured analysis of the findings. This approach facilitated the identification
of common trends, significant challenges, and potential solutions related to the ethical
and legal aspects of NFTs and the Metaverse (Tranfield, Denyer, & Smart, 2003).
3.6 Results of Research and Findings
The advancement of Metaverse and NFTs technology in the United Arab Emirates (UAE)
and Middle East region included in this literature review is given in Table 3 below:
4 Discussion
This review article provides a comprehensive examination of Non-Fungible Tokens
(NFTs) and the Metaverse in the United Arab Emirates (UAE), emphasizing the ethical
and legal challenges raised by these technologies. Powerful economies, such as the
UAE, have realized the potential of the Metaverse to revolutionize business models [40].
Recently, Dubai adopted a new economic metric called Gross Metaverse Product (GMP)
to reflect its economic contribution, replacing the traditional Gross Domestic Product
(GDP) [40].
According to the Dubai Metaverse Strategy, the city aims to attract global metaverse
businesses and integrated technologies by 2030, resulting in the creation of more than
40,000 jobs [8]. In the past year, approximately $10 million was raised by three NFT
marketplaces in the Middle East [6]. Art Dubai, the region’s largest art festival, is now
dedicated to digital art and NFTs [7].
The fields of Metaverse and NFTs have seen significant growth in the Middle East.
Kuwait’s digital art gallery Bawa hosted its inaugural NFT art exhibition, and Saudi
artist Abdulazeez launched the world’s first Artist-Approved Physical NFT (AP-NFT)
[8]. Elie Saab’s international fashion house entered the Metaverse by opening a virtual
store, and the MBC group, a leading media organization in the Middle East and North
Africa, launched the NFT Genesis collection, offering more than 200 properties to buyers
[8].
254 A. Alsuwaidi and I. Dondjio
Table 3. Objective - significance and advancement of Metaverse and NFTs in UAE
The British
Blockchain
Association
allowing people to "live" in the
Metaverse while the city is being built.
2. Naqvi, N. The Journal of
The British
Blockchain
Association
2023 Saudi Arabia celebrated its 92nd
National Day in the Metaverse with NFT
attire, an outdoor museum, and wearable
NFTs.
3. Pavel Sidorenko
Bautistaa;
4. Pavel Sidorenko
Bautistaa;
Fuori Luogo 2022 The Virtual Assets Regulatory Authority
(VARA) of Dubai established an office in
The Sandbox, becoming the first crypto
regulator in the Metaverse.
Fuori Luogo 2022 Metaverse Dubai, 2D and 3D semi-
immersive in 2021 can be accessed via
mobile and PC
5. Naqvi, N. The Journal of
The British
Blockchain
Association
2023 The UAE aims to be a regional leader
with its 5-year Metaverse strategy,
aiming for 40,000 virtual jobs and $4
billion in economic growth.
6. Salloum, S. A.,
Bettayeb, A.,
Salloum, A.,
Aburayya, A.,
Khadragy, S.,
Hamoudi, R., &
Alfaisal, R.
7. AlAli, M., &
Alshamsi, H.
8. К"ш$р$&'р, (.
(.
Informatics in
Medicine
International
Journal of
Education
Bulletin of Brest
State Technical
University
2023 Novel machine learning and medical
training for the stents of UAE during
COVID-19
2023 Integration and effectiveness of
Metaverse technology in police academy
education and training.
2023 The UAE's MetaHealth platform allows
users to remotely communicate with
customer service and draw up
documents.
9. Kuru, K. IEEE Access. 2023 MetaOmniCity offers urban elements
and immersive environments, attracting
more residents to the city ecosystem.
10. DEM)R, Ç Journal of
Gastronomy,
Hospitality and
Travel,
2023 Medcare Women's and Children's
Hospital in Dubai utilizes the Metaverse
for medical tourism, offering an
immersive hospital view.
Yaqoob, I., Sa-
11. lah, K., Jayara-
man, R., & Omar,
M
Internet of Things 2023 Smart cities in the UAE use digital
technologies to improve infrastructure,
governance, and economic growth
through the Metaverse.
S.No Author Publisher Year Findings
1. Naqvi, N. The Journal of 2023 Saudi Arabia built the world’s first
Metaverse, “cognitive city” – XVRS,
Ethical and Legal Challenges of NFTs and the Metaverse in the UAE 255
The Metaverse has attracted attention from both industry and academia in the UAE.
It is generally viewed as a pool of extended reality (XR) spaces where humans and
their digital counterparts interact in a fully immersive manner [41]. There are many
potential uses for the Metaverse in the UAE, including public services, remote gover-
nance, public service delivery, improved social connectivity, increased government trans-
parency and accountability, better access to information and education, job opportunities,
improved accessibility for individuals with disabilities, and new forms of creativity and
entertainment [42].
According to this study, it is believed that by 2040, users will fully engage in the
Metaverse’s immersive capabilities as an essential part of their daily lives as the tech-
nology becomes more sophisticated and seamless [6]. However, as the Metaverse is still
in its early stages of development, its functionality and experience design may be lim-
ited [24]. Wandering in the Metaverse can become monotonous if consumers’ virtual
activities are confined to chatting and trying new outfits with their avatars [27]. This
limitation may pose challenges for businesses trying to retain customers in the virtual
world to enhance the brand experience [6].
The Metaverse has both positive and negative impacts. On the positive side, it offers
a vast area for artistic expression, collaboration, and sharing, thus boosting creativity
in advanced ways. Conversely, it may negatively affect creativity by promoting popular
content and limiting exposure to new ideas and innovations. The captivating nature of the
Metaverse might lead to addiction similar to social media platforms, potentially making
people unhappy and isolated, and affecting their mental health.
The government of Abu Dhabi, the capital of the UAE, is strongly investigating NFTs
and blockchain technology as a path for future economic growth. The establishment of
the Abu Dhabi Global Market (ADGM) aims to facilitate the transition to a [38]digital
economy by creating policies that promote innovation [43]. The “digital assets” archi-
tecture of the ADGM helps establish rules for asset security, governance, and money
laundering prevention. Additionally, it created the RegLab Sandbox, a safe space for
companies to test new financial innovations [44].
Despite the potential benefits, it is crucial to recognize and address the challenges
associated with NFTs and the Metaverse. These challenges include issues with identifica-
tion, ownership, privacy, legality, security, accessibility, affordability, and the availability
of necessary technologies [45]. The growing awareness of NFTs has led to increased
cryptocurrency investments, despite cryptocurrency’s significant environmental impacts.
For example, Ethereum, the foundation of NFT technology, is expected to consume 44.94
terawatt-hours of electricity annually, equivalent to the power consumption of developing
nations like Qatar [16].
Overall, while the UAE is positioning itself as a leader in the Metaverse and NFT
space, addressing the ethical, legal, and environmental challenges is crucial for sustain-
able growth. By developing robust regulatory frameworks and fostering innovation, the
UAE can maximize the benefits of these technologies while mitigating their negative
impacts.
256 A. Alsuwaidi and I. Dondjio
5 Conclusion
Based on the available literature, NFTs and Metaverse technology are being widely
implemented in the Middle East, particularly in nations like Saudi Arabia and the United
Arab Emirates (UAE) [10]. The adoption of NFTs and Metaverse in the UAE represents
a significant opportunity for the region to position itself as a leader in the development of
cutting-edge technology. Although the acceptance of NFTs and Metaverse technology
has advanced, there are still unresolved ethical and legal issues that need attention [45].
Overall, the potential benefits of NFTs and Metaverse technology are numerous, and
their realization could lead to significant improvements in the lives of citizens, as well
as greater economic competitiveness and innovation in the region.
5.1 Research Limitations
This study has several limitations that should be considered when interpreting the find-
ings. The review primarily focuses on articles selected from scholarly databases, exclud-
ing conference papers and books with chapters on NFTs and the Metaverse. Additionally,
this review specifically examines the challenges faced by NFTs and the Metaverse in
the UAE, which may limit the generalizability of the findings to other regions. Future
research should address these limitations by including a broader range of sources and
examining the challenges in different geographic and cultural contexts.
5.2 Future Recommendations
As the UAE continues to establish itself as a global hub for blockchain technology,
the adoption and development of NFTs and Metaverse applications are expected to
be disruptive innovations [46]. These technologies can significantly impact how the
government informs, transacts, and engages with citizens, enhancing security, efficiency,
and flexibility for both citizens and businesses [47].
To maximize these benefits, it is crucial for the UAE to leverage its first-mover advan-
tage in the region and globally to maintain and strengthen its leadership position. The
creation of a Global Blockchain Council by the Dubai Government indicates a strong
commitment to the future of NFTs in the UAE [22–51]. As a global leader, it is recom-
mended that the UAE enhance its financing and entrepreneurial ecosystem to foster the
development of innovative NFTs and Metaverse technology applications [48]. Moreover,
comprehensive and in-depth studies should be conducted to overcome the limitations of
this review. These studies should explore a wider range of sources, including conference
papers and book chapters, and examine the challenges and opportunities associated with
NFTs and the Metaverse across different regions. By doing so, the UAE can continue to
innovate and lead in the rapidly evolving landscape of blockchain technology.
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