Maldives facing cash crunch, sets eyes on $9 bn blockchain to lure investors

While navigating through its economic woes, the Maldives is all set to build a whopping $9 billion blockchain hub to revive its economy. According to a report by The Financial Times, a Dubai-based family office has announced plans to invest a whopping $8.8 billion to build a “blockchain and digital assets” financial hub in the Maldives.

With this investment, the island nation on the Indian ocean is hoping to navigate through a looming debt crunch. As per the report, the blockchain investment is led by family office MBS Global Investments over the next five years. On paper, the investment would exceed the Maldives’ annual GDP of around $7bn.

While talking about the deal, Moosa Zameer, finance minister, said the country needed to “leap” to diversify away from just tourism and fisheries . “Debt coming due in the next two years was the biggest challenge that we have”, Zameer told The Financial Times, adding that the deal was “something we see as a potential contributor to bring us out of certain difficulties that we are in”.

More from Business

Hyundai India’s Rs 27,870 crore IPO oversubscribed by 2.28X, largely driven by institutional investors How Indian fintech startups are driving Malaysia’s UPI-like digital payments revolution

Why the Maldives

On Sunday, MBS Global Investments and the government of Maldives signed a joint venture agreement on the project. When asked about the deal, the company said that it manages assets worth approximately $14 billion in the family office of a wealthy Qatari, Sheikh Nayef bin Eid Al Thani.

The company stated that it plans to finance the Maldives investment by tapping its network of family offices along with high net worth individuals to form a consortium. While speaking to The Financial Times, MBS’s chief executive Nadeem Hussain said the phased project could be funded through equity and debt and that firm commitments “north of” $4bn-$5bn had already been secured.

“We appreciated right from the offset what was involved in terms of funding and we’ve made the necessary alliances and brought in the necessary partners to ensure we have that,” said Hussain. “It is a large sum of money,” he added.

Impact Shorts

More Shorts

Chennai Ranks #1 in Challan Checks: ACKO Insights for Smarter Car and Two Wheeler Insurance Decisions

Tata Harrier EV vs Mahindra XEV 9e: Design and road presence compared

What’s in store

According to the project’s masterplan obtained by The Financial Times, the Maldives International Financial Centre will be a 830,000 sq m hub and would be able to host 6,500 people and provide employment for 16,000 in the country’s capital Malé.

The master plan noted that the project aims to triple the Maldives’ GDP within four years and generate revenue of “well over $1bn by the fifth year". It is pertinent to note that the deal announcement came just days after India unveiled a $760mn bailout for the Maldives to help the nation deal with its sovereign default.

While speaking to The Financial Times, Zameer called both India and China “development patterns” and acknowledged that both nations played a crucial role in helping the country’s economy. “With MBS we are getting into business, it’s going to be a business which is different from the traditional models of borrowings that we do,” the finance minister said.