Regulation
Binance Abu Dhabi Executive: “Regulatory Approaches Can Evolve”
In an exclusive interview with crypto.news, Dominic Longman, senior executive officer at Binance Abu Dhabi, talks about the growing institutional interest in cryptocurrencies, potential crypto ETFs and the region’s efforts to attract web3 talent.
In February, the Financial Action Task Force (FATF) REMOVED the UAE and several other jurisdictions from its gray list, stating that the region “has strengthened the effectiveness of its AML/CFT regime to meet the commitments of its action plan addressing the strategic deficiencies identified by the FATF in February 2022” .
Crypto.news interviewed Dominic Longman, senior executive of Binance Abu Dhabito discuss the implications for cryptocurrencies in the region following this removal.
Q: With the recent exclusion of the United Arab Emirates from the FATF “greylist”, it appears that the region is gaining significant ground. For example, US-based companies like Chainalysis now are establishing offices in the area, so I am eager to understand whether this development has led to a shift in cryptocurrency adoption among traditional businesses, such as venture capital firms, pension funds, banking giants, or whether exclusion from the gray list has significantly has influenced the local perception of cryptocurrencies.
A: The recent exclusion of the UAE from the FATF greylist represents 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]. It 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 cryptocurrencies, international recognition of the UAE’s progress in combating fraudulent financing practices such as money laundering is encouraging.
We are seeing growing institutional interest and activity in the crypto space and believe this could pave the way for broader adoption across various financial institutions over time. The UAE is at the forefront of cryptocurrency adoption globally and has established itself as a leading crypto hub, an ecosystem that Binance is proudly a part of and further fosters. By encouraging and facilitating collaboration between key stakeholders within the ecosystem, including governments, regulators, innovators, startups and established organisations, we can create synergies and accelerate blockchain adoption in the region.
Q: There are currently no Bitcoin exchange-traded funds (ETFs) accessible in the United Arab Emirates. Considering the recent approvals of Bitcoin ETFs in the US and Hong Kong, what are the chances that the UAE authorities might change their approach? Furthermore, how significant could the UAE market become for cryptocurrencies, considering that Hong Kong, despite its diverse offering 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 represents a significant milestone for the cryptocurrency industry, indicating growing acceptance and recognition. The introduction of a Bitcoin spot ETF brings legitimacy to the digital asset sector, building trust in the market among a wider audience and has triggered a surge in trading volumes, reflecting greater accessibility to cryptocurrency investments for both retail and institutional investors. While 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 shown a proactive attitude towards blockchain and cryptographic innovations, so there is potential for future developments in this sector. In terms of market importance, the UAE’s strategic location and forward-thinking virtual asset policies have positioned the country at the forefront of cryptocurrency adoption and cemented its status as an international crypto hub, as highlighted by the Henley & Partners Crypto Wealth Report 2023 which found that the UAE boasts the highest cryptocurrency adoption rate globally.
Q: In Europe, many small to medium-sized crypto startups tend to register in Lithuania, Estonia or other Eastern European countries due to their relatively simplified regulatory approach to cryptocurrencies. What challenges, if any, do companies face when starting or developing their cryptocurrency businesses in Dubai?
A: Navigating 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 support initiatives that provide clarity and streamline startup processes corporate.
Some large industry players and regulators such as VARA have identified that moving to a regulated model for virtual assets – covering access to banking services, regulatory capital requirements and staff costs, among other areas – is a challenge significant, but plans that enable collaborative approaches to these issues among stakeholders (e.g., larger companies assisting smaller startups with compliance and legal processes) have already been put in place.
The growing influx of crypto companies moving to 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, further strengthened by programming schools supported by the government and other talent-focused centers. initiatives (e.g. visas) that make it easier for crypto companies to find the talent they need to grow locally.
Binance has been actively expanding its presence in the UAE, particularly in Dubai, thanks to the Emirate’s leading position in the growth and development of web3, the favorable and forward-looking regulatory environment and government initiatives to support 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 promoting innovation in the MENA region.