Abu Dhabi Intensifies Effort to Become Middle East’s Crypto Hub
The United Arab Emirates capital, Abu Dhabi, is stepping up its efforts to attract crypto-focused businesses. It aspires to be the Middle East’s leading crypto hub.
Shorafa Al Hammadi, Chairman of the Abu Dhabi Department of Economic Development, stated that the government had set a deadline for this year’s end. It will ease passporting between digital cryptocurrency exchanges to ‘normal’ instruments.
Two Regulated Digital Asset Exchanges; More to Come
According to Emmanuel Givanakis, CEO of Abu Dhabi’s Financial Services Regulatory Authority, the emirates are already among the global leaders developing a crypto-friendly regulatory environment. It is after having established an initial framework in 2018.
The emirates hope to attract more regulated digital asset exchanges with a comprehensive regulatory regime. Already, two of the exchanges — Matrix Exchange and Midchains — are operational in Abu Dhabi. A third, DEX, will begin entire operations soon.
Additionally, the whole ecosystem in Abu Dhabi is working together to make it easy for all the actors in that space to shift there. It is also essential to develop a legal framework. He added that they are to find the pain points everywhere to eliminate them and develop a powerful, robust regulatory framework.
The Focus is Shifting to Technology
Abu Dhabi’s determination to become a crypto hub is part of the city-effort state’s restructuring of its economy. They are trying to shift away from reliance on oil and gas and toward a greater emphasis on technology.
Abu Dhabi provides a fintech sandbox for the private sector to test their products in a live environment. Hence, ensuring they meet the UAE’s strict anti-money-laundering (AML) and other regulatory standards.
Dubai, Abu Dhabi’s neighbour .and fellow emirate, is eager to attract digital-assets firms. It announced last week that it has enlisted Binance to assist it in developing an “international virtual asset ecosystem.”
Blockchain Development in MENA
On December 27, 2021, Binance announced that it had also received approval for a license-in-principle in Bahrain. Binance had applied to the CBB for a license as part of its plans to become a fully-regulated centralised cryptocurrency exchange.
CBB is the first regulator in the Middle East North Africa (MENA) region to grant in-principle approval to a Binance entity, according to an official statement from the crypto exchange.
CBB’s in-principle approval still requires Binance to complete the entire application process, which is expected to be completed soon.
Binance has been targeted by financial regulators all over the world this year. Some have prohibited the platform from engaging in certain activities, while others have warned consumers that it is unlicensed to operate in their jurisdictions.
According to Amy Oldenburg, head of emerging market equities at Morgan Stanley Investment Management, a challenge for regulators is ensuring they don’t stifle innovation while trying to protect investors.
The UAE and Abu Dhabi appear to be striking the right balance in regulating cryptocurrency. However, not in such a way that they stifle the growth and exploration that will continue for long.