Dubai regulator seeks to ease costs for small crypto firms

Dubai's virtual assets regulator is seeking ways to lower the cost for small crypto firms.

“There's a number of things that I'm looking at the moment in order to try and make the regime and the regulation fit for everybody,” Matthew White, CEO of Dubai's Virtual Assets Regulatory Authority (VARA), said at the recent Paris Blockchain Week, according to Coindesk. “What one of those is, is figuring out a way to deal with the cost of compliance for smaller entities.”

Dubai is emerging as a major hub for cryptocurrencies, and a number of crypto firms have been opening their units in the emirate.

“Not many people have the resources to be able to go and get regulated and that is something that we've seen, so we're looking at structures whereby we can have larger market participants hosting smaller ones, for example,” White was quoted by Coindesk as saying.

Experts in the field have welcomed the move.

“This move is not only strategic but necessary, considering the pivotal role these enterprises play in the broader crypto ecosystem. The high costs associated with meeting regulatory standards can stifle innovation and deter smaller players who are critical for the diversity and dynamism of the market,” said Amir Tabch, CEO, Middle East at Liminal Custody Solutions.

“This initiative by Dubai's VARA to balance stringent regulatory demands with the economic realities faced by smaller firms is a vital step forward,” he added.

Vugar Usi Zade, COO at Bitget, said: "The UAE'S proactive approach in nurturing a welcoming atmosphere for the crypto industry while effectively addressing the concerns of smaller firms is worth noticing. Observing regulators like VARA actively seeking solutions to decrease compliance barriers is a positive sign not only for crypto but for the development of broader WEB3 ecosystem. The region has demonstrated its commitment to inclusivity and innovation in the digital assets space by exploring innovative policies that enable startups to succeed with lower entry barriers. These endeavours are bound to strengthen the local startup ecosystem and serve as a positive example for regulatory frameworks worldwide."