Regulation
Binance Abu Dhabi CEO: “regulatory approaches may evolve”
In an exclusive interview with crypto.news, Dominic Longman, Managing Director of Binance Abu Dhabi, discusses the growing institutional interest in crypto, potential crypto ETFs, and the region’s efforts to attract Web3 talent.
In February, the Financial Action Task Force (FATF) deleted the UAE and several other jurisdictions on its gray list, saying the region “has strengthened the effectiveness of its AML/CFT regime to meet its action plan commitments regarding strategic deficiencies identified by the FATF in February 2022.”
Crypto.news interviewed Dominic Longman, CEO of Binance Abu Dhabito discuss the implications for crypto in the region following this removal.
Q: With the UAE recently excluded from the FATF “grey list”, it appears the region is gaining ground. For example, US-based companies like Chainalysis are now establishment offices in the region, so I look forward to understanding whether this development has led to a change in crypto adoption among traditional businesses, such as venture capital firms, pension funds, banking giant, or if the gray list exclusion has not significantly changed. has had an impact on the local perception of crypto.
A: The recent exclusion of the UAE from the FATF gray list is a positive development for the region’s financial landscape and for the UAE’s position as a leading economic power in the MENA region. [the Middle East and North Africa]. This reflects the country’s commitment to improving its regulatory framework and transparency. While it is difficult to quantify the direct impact on institutional adoption of crypto, the international recognition of the progress the UAE has made in combating fraudulent financing practices such as money laundering is encouraging .
We are seeing growing institutional interest and activity in the crypto space, and we believe this could pave the way for broader adoption among various financial institutions over time. The UAE is at the forefront of crypto adoption globally and has established itself as one of the leading crypto hubs, an ecosystem that Binance is proud to be a part of and which it favors more. By encouraging and facilitating collaboration among key ecosystem stakeholders, including governments, regulators, innovators, startups and established organizations, we can create synergies and accelerate blockchain adoption in the region .
Q: Currently, there are no Bitcoin exchange-traded funds (AND F) accessible in the United Arab Emirates. Given the recent approvals Bitcoin ETFs in the US and Hong Kong, what are the chances that the UAE authorities will change their approach? Additionally, how important could the UAE market become for crypto, given that Hong Kong, despite its diversified offerings with Bitcoin and Ethereum ETFs, has not attracted as much capital as expected?
A: The approval of Bitcoin ETFs in the United States and Hong Kong is a significant milestone for the crypto industry, indicating growing acceptance and recognition. The introduction of a Bitcoin spot ETF lends legitimacy to the digital asset sector while building confidence in the market among a wider audience and has triggered an increase in trading volumes, reflecting increased accessibility to crypto investments for individual and institutional investors. Although there are currently no Bitcoin ETFs available in the UAE, regulatory approaches may evolve based on global trends and local market demands.
The UAE has demonstrated a proactive attitude towards blockchain and crypto innovations, so there is potential for future development in this area. Regarding the importance of the market, the UAE’s strategic position and forward-thinking virtual asset policies have placed the country at the forefront of crypto adoption and solidified its status as an international crypto hub, as highlighted in the report. Henley & Partners Crypto Wealth Report 2023 which revealed that the UAE has the highest cryptocurrency adoption rate in the world.
Q: In Europe, many small and medium-sized crypto startups tend to register in Lithuania, Estonia or other Eastern European countries due to their relatively simplified regulatory approach to cryptography. What challenges, if any, do businesses face when starting or expanding their crypto businesses in Dubai?
A: Adapting to regulatory requirements and ensuring compliance can be complex, but the UAE government is actively working to provide a dynamic environment for crypto startups by developing robust infrastructure and supporting initiatives that provide clarity and streamline business creation processes.
Some major industry players and regulators such as VARA have identified that moving to a regulated model for virtual assets – one that covers access to banking services, regulatory capital requirements and staff costs, among other areas – is a significant undertaking, but plans that enable collaborative approaches to these issues between stakeholders are already in place (i.e. large companies helping small startups with their compliance and legal processes).
The growing influx of crypto companies setting up shop in the UAE, in particular, has also had an impact on the talent attraction front and has generated a growing talent pool for the industry in the country, bolstered by government-backed coding schools and other talent hubs. initiatives (i.e. visas) making it easier for crypto companies to find the talent they need to grow locally.
Binance has actively expanded its presence in the UAE, particularly Dubai, due to the Emirate’s leading position in the growth and development of web3, the favorable and forward-looking regulatory environment and government initiatives in favor of the digital asset ecosystem. Furthermore, the government’s proactive stance on blockchain technology, as evidenced by initiatives such as the Dubai Blockchain Strategy and the Metaverse Strategy, underlines its commitment to driving innovation in the MENA region.