Dubai’s Virtual Assets Regulatory Authority (VARA) has implemented comprehensive requirements for the cryptocurrency space, and professionals in the licensing industry believe that despite the lengthy process, it is worth it.
Cointelegraph reached out to crypto licensing executives in Dubai to gather their opinions on the local licensing process and laws.
Tao Xiao, managing partner of business consulting firm NH Management, stated that VARA’s crypto licensing process can take up to a year. Xiao, who previously worked at Dubai’s Chamber of Commerce, emphasized that the process requires careful attention to detail and strong compliance measures. Xiao stated:
“Dubai’s stringent regulatory framework reflects its commitment to maintaining market integrity and safeguarding investor interest. Through strict adherence to AML and KYC standards, VARA ensures robust protocols to mitigate risks and prevent illicit activities in the crypto market.”
In 2022, the United Arab Emirates (UAE) was placed on the Financial Action Task Force’s (FATF) “gray list” of jurisdictions under increased monitoring. In response, the UAE introduced more comprehensive guidelines and laws to combat money laundering. As a result, the jurisdiction was removed from the FATF’s gray list in February 2024, meaning it is no longer subject to additional scrutiny from the FATF.
Although compliance may be challenging, Xiao believes that there are numerous benefits to obtaining a license in Dubai. He also emphasized that the requirements are not impossible to fulfill. Xiao added:
“Companies situated in Dubai enjoy many benefits, including access to global markets, favorable tax policies, and a safe environment for financial technology innovation.”
Sam Blatteis, the CEO and co-founder of government affairs firm The MENA Catalysts, echoed this sentiment and explained why it is worthwhile for companies to establish a presence in Dubai. Blatteis stated:
“Despite its small size on paper, the UAE has tremendous potential. As a high-income economy with ubiquitous financial services and a large expat population, the adoption of cryptocurrencies is expanding exponentially, not incrementally.”
Blatteis also offered advice to firms looking to expand into the UAE, suggesting they undergo strategic recalibration and seek guidance from those who have already gone through the process successfully.
In a recent interview with Cointelegraph at Token2049, Chainlink co-founder Sergey Nazarov expressed his admiration for Dubai and the UAE, stating:
“I am very impressed with Dubai and the UAE. The government, regulators, legal system, and economics of Dubai are very attractive to our industry.”
Overall, professionals in the crypto licensing industry believe that despite the lengthy process, obtaining a license in Dubai offers numerous benefits and aligns with the country’s commitment to market integrity and investor protection.