Dubai will do for crypto what Silicon Valley did for technology – CEO of Government Affairs

Although the Dubai Virtual Assets Regulatory Authority (VARA) has deployed comprehensive requirements for the crypto space, experts working on licensing believe the lengthy process is worth it.

Cointelegraph spoke to crypto licensing executives working in Dubai to get their thoughts on the local licensing process and laws.

Tao Xiao, managing partner of NH Management, a business consulting firm, told Cointelegraph that the VARA crypto licensing process could take a year. Xiao, who previously worked at the Dubai Chamber of Commerce, said the process requires a high level of attention to detail and strict compliance measures. Xiao said:

“It is a complex and long process. The process of obtaining the necessary permits requires diligence and patience, as every aspect of the business is scrutinized to ensure compliance with anti-fraud and your-customer laws.

Xiao said Dubai's “strict” regulatory framework reflects its commitment to maintaining market integrity and protecting investors' interests. “By strictly following AML and KYC standards, VARA ensures strong protocols to mitigate risks and prevent illegal activities in the crypto market,” Xiao added.

In the year By 2022, the United Arab Emirates (UAE) is slated to be placed on the Financial Action Task Force's (FATFs) “grey list.”

Following its placement on the list, the UAE introduced more comprehensive guidelines and laws to combat money laundering.

As a result, the jurisdiction was removed from the FATF gray list in February 2024. This means the country will not face further scrutiny from the Paris-based financial watchdog, the FATF.

Although compliance can be difficult, Xiao believes that obtaining a permit in Dubai has many advantages. The executive also highlighted that the requirements are “impossible” to complete. Xiao added:

“So far, many projects are on the waiting list for VARA approval, indicating that compliance with the requirements cannot be approved. […] However, it is important to realize that the purpose of VARA is not to hinder growth but to ensure the safety and security of investors and the wider market.

Xiao pointed out that there are many benefits for companies in Dubai. This includes access to international markets, favorable tax policies and a secure environment for financial technology innovation.

Sam Blatts, CEO and Founder of Government Affairs, The MENA Catalysts, echoed the sentiment and explained why it would be beneficial for companies to set up shop in Dubai. Blates told Cointelegraph:

“The government is slowly doing for crypto what Silicon Valley did for tech. The country is fast becoming the Coachella of the crypto world.”

Blatheis explained that while the UAE may be small on paper, the place has huge potential. “As a high-income economy, ubiquitous financial services, more expats, use cases for crypto adoption are expanding, not increasing,” he added.

Blatteys also advises companies looking to expand into the UAE. The executive suggested that “systematic reform” should be implemented. This includes looking at others who have been through the process before.

The executive added that choosing people who have not only worked on legal matters, but who have “cut the proverbial ribbon” with authorities and achieved results, may be the best choice for companies.

Related: Dubai Crypto Regulator Aims to Ease Burdens for Small Entities

In a recent Token2049 interview with Cointelegraph, Chainlink founder Sergey Nazarov said that Dubai and the UAE are “very impressed”. Nazarov explained.

“I think the norm is increasing, and there is a large group of people from all over the world, from the West, the East, and Dubai, where they are doing transactions, starting organizations and building teams. He said.

Dubai's government, regulators, legal system and economics are “very attractive to our industry,” Nazarov said.

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