Dubai’s crypto landscape could soon expect a major re-alignment with an influx of smaller crypto firms and a slew of collaborative deals between market leaders and upcoming digital asset ventures in the wake of the emirate’s sector regulator’s move to lower the entry barrier for smaller entities, industry experts said.
Easing of entry barriers for smaller firms is to be done by lowering the regulatory cost.
A host of smaller and upcoming digital asset ventures from India and other parts of the world are currently said to be either in the process of finalising or considering entry plans into Dubai.
Sector biggies such as Bitget, Crypto.com, Nine Bocks and Deribit’s Dubai-based unit are among the leading industry players which could be sewing up collaborative deals with the smaller entities, industry insiders indicated.
The frenzy of activities follows the announcement by the chief of Dubai’s Virtual Assets Regulatory Authority (VARA) that the regulator aims to facilitate smaller crypto entities by lowering the cost of compliance for small digital asset firms.
VARA CEO Matthew White disclosed that the regulator was considering many ways to try and make the regime and the regulation fit for everybody.
“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,” said at Paris Blockchain Week last Wednesday.
Move to serve as a positive example for regulatory frameworks worldwide
The pronouncement by VARA chief was widely welcomed by crypto market players in the Middle East and across the world, with several industry experts pointing out that the regulator’s proactive approach to addressing the concerns of smaller firms will mark a turning point for the industry in the UAE, as also in the wider region.
They also said besides further strengthening the local startup ecosystem, these endeavours are bound to serve as a positive example for regulatory frameworks worldwide.
“VARA actively seeking solutions to decrease compliance barriers is a positive sign not only for crypto but for the development of broader WEB3 ecosystem,” Vugar Usi Zade, COO of Bitget, a leading global crypto exchange and web3 company with major operations in the UAE, told Arabian Business.
The Bitget senior executive also hinted at the company looking at working out collaborative deals with smaller digital asset ventures in the wake of the latest regulatory initiative.
“At Bitget we look forward to continued collaboration and growth within UAE’s vibrant crypto landscape,” Usi Zade said.
Lowering entry barriers to help startups to succeed in Dubai, UAE market
The Bitget COO said lowering entry barriers will not only lead an influx of startups and smaller crypto ventures to make an entry into Dubai, but will also enable them to succeed in the fast growing market in the region, and also globally.
Amir Tabch, CEO – Middle East at Liminal Custody Solutions, said the proposed move by VARA will not only be strategic but necessary, considering the pivotal role the smaller 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,” Tabch told Arabian Business.
“VARA’s proactive approach in refining these policies to support the underdogs demonstrates a deep understanding of the sector’s challenges and a genuine commitment to fostering an inclusive and innovative financial landscape,” he said.
Tabch said by potentially involving larger entities to aid the smaller ones, the Dubai regulator is also setting a precedent for a collaborative and supportive regulatory environment.
“This [proposed] initiative by Dubai’s VARA to balance stringent regulatory demands with the economic realities faced by smaller firms is a vital step forward.
“It shows a forward-thinking commitment to nurturing growth and ensuring that the crypto market remains robust and accessible to all players, regardless of their size,” he said.
The move is expected to give a further fillip to not only the crypto market in Dubai, but in the wider MENA region, which is estimated to have already more than 1,800 organizations, employing 8,650 people across the digital asset industry, according to the Crypto Oasis Ecosystem report.
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