It seems that prominent crypto exchanges are increasing their efforts to establish themselves in the Arab Gulf States. Moreover, the regulatory authorities in these regions also seem to be quite welcoming nowadays. The latest exchange to have made a move is Binance, which has obtained a license for operating in Bahrain as a crypto asset service provider. Likewise, its competitor, FTX, also recently obtained a license for operating as a digital asset exchange in the United Arab Emirates (UAE). The Central Bank of Bahrain is issuing the license to Binance and this will enable the company to get permission for operating as a crypto-asset service, which is a first for a member of the GCC.
The chief executive and co-founder of Binance, Changpeng Zhao (CZ) said that this license was the latest milestone in the company’s plan of expanding its position globally. He said that where crypto regulations were concerned, Bahrain had shown a great deal of foresight in developing them and offers the regulatory protection that people expect to get from their regulatory authorities. Zhao added that the company had strived for fulfilling the Central Bank of Bahrain’s criteria, both globally and locally. The CEO said that the company had met the requirements of the regulators and had opted to adopt strong counter-terrorism financing and anti-money laundering policies.
FTX, on the other hand, is planning to set up regional headquarters in Dubai, where it has gotten a license for securing a digital asset exchange. The license will belong to the European subsidiary of the exchange and this expansion will help it in launching their clearinghouse and virtual asset exchange services in the Emirates. The chief executive of FTX, Sam Bankman-Fried, stated that the company was going to introduce complex crypto derivatives products. The legislation had been adopted in Dubai earlier this month for regulating its crypto industry.
This would be done by a dedicated regulator that has been established for this purpose named Virtual Asset Regulatory Authority (VARA). The Ruler and Vice President of Dubai, Sheikh Mohammed bin Rashid said that the independent authority had been established for overseeing virtual assets in order to create the best business environment globally. This would include licensing, regulation and governance in accordance with the global and local financial systems. Dubai World Trade Center Authority’s Director-General, Helal Saeed Almarrisaid that the new regulator of emirates would help in fostering innovation, collaboration and provide public protection.
This is an indication that Dubai is ready to welcome some of the prominent players of the crypto industry in its financial system. However, it only wants to keep the doors open for crypto businesses that are highly reliable. Almarri said that adding FTX to this list highlights their goal to only allow credible players who are committed to future-proofing the crypto industry. As for Binance, this is undoubtedly a big milestone, particularly considering the regulatory challenges that the exchange has been facing of late, which has resulted in issues for the exchange.