UAE aims to be a cryptocurrency hub

Allowing DWTC free zone companies to trade in crypto allows user base to grow

UAE could well emerge a global cryptocurrency hub as local regulators make moves to expand its usage among businesses.

On Wednesday, the Securities and Commodities Authority (SCA) allowed companies based within Dubai World Trade Centre Authority’s (DWTCA) free zone to trade in crypto assets and take on related financial activities. In the UAE, at the individual level, trading in cryptos, including Bitcon and Ether, has been growing exponentially.

But with the new deal, this takes on much greater visibility. The SCA will handle the regulatory oversight of the issuance, offering, listing and trading of crypto assets as well as the licensing of the associated financial activities that fall under DWTCA’s jurisdiction.

“Cryptocurrency adoption in the Middle East is higher than it’s ever been - user signups have also soared, effectively doubling our platform’s user base in the last six months,” said Srinu Chowhan, Vice-President of Marketing & Growth, BitOasis.

Although crypto prices declined nearly 50 per cent between April and July, more than $2 billion (Dh7.4b) of investment was allocated to the sector in August. “This emerging sector is growing in breadth and depth during a period of pandemic-driven turbulence and unprecedented economic policy interventions,” said Terry Culver, CEO of Matrix, a crypto trading platform, is registered with Abu Dhabi Global Market (ADGM). “Underneath all of that, technical and financial innovation is flourishing.”

More than $2 billion of investment was allocated to the sector in August.

Regulatory action

While the region prepares to deliver on the rising demand for these assets, there are also significant inroads being made on the regulatory front. “With growth comes regulation — it is a necessary stage of development for the sector, and the recent and ongoing regulatory changes are significant,” said Culver. “The ADGM virtual asset policy framework is thoughtful and clear, and sets a high standard — It enables us to build our business with confidence that we are protecting our customers,” said Culver.