Abu Dhabi Steps Up Efforts To Become Middle East Crypto Hub

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Abu Dhabi’s determination to become a crypto hub is part of its efforts to reduce its dependence on oil and gas.

Abu Dhabi, the capital of the United Arab Emirates, is stepping up efforts to attract crypto-focused companies as it seeks to become the leading cryptocurrency hub in the Middle East.

In an interview with Blockworks, Abu Dhabi Economic Development Department Chairman Shorafa Al Hammadi said the Abu Dhabi government has set a deadline at the end of this year to “facilitate the passport between digital cryptocurrency exchanges at “normal” instruments. “

The emirate is already among the world leaders in developing a crypto-friendly regulatory environment, having established an initial framework in 2018, according to Abu Dhabi Financial Services Regulatory Authority CEO Emmanuel Givanakis. “At that time, the industry was already talking about the need to come under a regulatory umbrella, and we came up with what we believe to be a fairly comprehensive framework,” Givanakis told Blockworks.

Abu Dhabi’s neighbor and compatriot Dubai is also keen to attract digital asset companies and revealed last week that it had tapped Binance to help it develop an “international ecosystem of virtual assets.” Binance announced on December 27, 2021 that it had also received approval for a license in principle in Bahrain.

Two regulated digital asset exchanges – Matrix Exchange and Midchains – are already operating in Abu Dhabi and a third, DEX, is expected to start fully operating soon, according to Al Hammadi.

Shorafa Al Hammadi, Chairman, Abu Dhabi Economic Development Department

“The whole ecosystem of Abu Dhabi… works together to facilitate the task of all the actors of this space, not only to attract them but to bring them here, to develop the legal framework, to find what are the points weak in the world so that we can remove them and have a very strong and solid regulatory framework for these people, ”Al Hammadi said.

Abu Dhabi’s determination to become a crypto hub is part of its efforts to overhaul its economy to reduce its dependence on oil and gas. As part of this effort, the emirate is focusing on innovation in fintech, providing the private sector with a fintech sandbox where they can test their products in a real-world environment to ensure they meet strict anti-money laundering rules (AML) and other regulatory standards.

“The number one risk we focus on is AML, but technology governance systems and controls, client money protection, custody and currency trading risks are all really big risks for us. “said Givanakis. “We had to develop systems to monitor these executives. “

Amy Oldenburg, head of emerging markets equities at Morgan Stanley Investment Management, said a challenge for regulators is to ensure they don’t stifle innovation as they try to protect investors. “It’s really important for traders that regulators think about… how to enable the innovation and adaptation needed as things change,” she told Blockworks. “The United Arab Emirates and Abu Dhabi seem to strike the right balance between putting in place regulations [crypto] but not so much that they restrict the growth and exploration that will continue for many years to come.

Givanakis said Abu Dhabi’s efforts to ensure it has a comprehensive regulatory framework for a wide range of digital securities, including digital funds and derivatives, are helping it attract interest. international. “We’re one of the few places where they think they can settle down and people are trying to understand them and trying to figure out how to regulate them,” he said.

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Dan Keeler

Blockworks

Editor-in-chief

Dan Keeler is Editor-in-Chief of Blockworks. Prior to joining Blockworks, he was Frontier Markets Editor-in-Chief at The Wall Street Journal where he managed the cover of the Small Emerging Markets Journal and created a number of high profile events and a highly regarded newsletter. Prior to joining the WSJ, he was editor-in-chief of Global Finance magazine. He is also the founder of the New York FM Network, a group that organizes gatherings of finance professionals focused on small emerging markets.

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