The United Arab Emirates (UAE) has always been a desirable place for companies. With one of the world's largest concentrations of wealth and a myriad of opportunities for connections and growth, companies looking to scale and access influential talent appreciate working in the Middle East.
We, therefore, aren't surprised to see the UAE making moves to capture crypto - one of the fastest-growing industries worldwide.
Kraken Joins The Fold
Last week, the Kraken crypto exchange became the latest company in the space to get a license to operate in Abu Dhabi. In an interview with CNBC, Curtis Ting, Kraken's managing director, confirmed the exchange had obtained an operating license for the Abu Dhabi Global Market - an international financial center and free trade zone.
Ting said Kraken is seeking to diversify operations and support different countries. As part of the company's expansion into the Middle East, Ting said Kraken would expand their crypto trading pairs to prominent local currencies in the region, allowing people to trade without depending on the dollar or British pound.
With its Abu Dhabi operating license, Kraken hopes to strengthen integration with local banking institutions and payment services. Ting said Kraken wants to improve liquidity for local users and the utility of crypto across the region.
"For us, it's really important to facilitate access to global markets and global liquidity by making sure that investors and traders in the region have access to local currencies trading pair," Ting said.
Welcome To The Club, Kraken
Kraken's license approval is just the latest in crypto developments across the Middle East and the UAE. We've seen a wave of crypto exchange approvals this year, hinting at the region's readiness to expand its influence in the crypto space.
In March, fast-rising exchange FTX became the first crypto exchange to receive an operating license from the Dubai Virtual Asset Regulatory Authority (VARA). The exchange acquired a VAX license, allowing it to operate within Dubai's crypto market provided that it complies with established regulators like the Financial Action Task Force (FATF).
At the time, FTX founder Sam Bankman-Fried boasted that the company was the first and only licensee under Dubai's regulatory regime. While the "first" part was true, the "only" part didn't last long. A few days after FTX got its license, Binance - the market leader - also got its nod.
Binance quickly moved on the heels of FTX in getting its virtual asset service provider license from the Dubai regulators. The license allows the company to set up an office in Dubai and offer digital asset exchange services to pre-qualified investors and accredited financial companies based on the region's crypto and financial models.
In April, the world's leading exchange did one better, achieving an in-principle approval to operate from Abu Dhabi regulators. The in-principle approval allows the company to operate as a broker-dealer in cryptocurrencies across the region. Rumors suggest Binance may also set up an office here.
A New Home For Exchanges?
Dubai and the UAE are looking to lure crypto exchanges. But two of the three exchanges listed above have had issues finding and securing headquarters.
For years, Binance operated as a floating entity with no real base of operations. Kraken has been based in San Francisco since its founding, but the company recently made the decision to leave Silicon Valley after rising crime rates and social vices put employees at risk.
Whether these exchanges end up basing operations in Dubai or the UAE remains to be seen. It wouldn't be a bad idea - the region stands as one of the most attractive places to work and a promising crypto arena.