Binance’s New Frontier: The United Arab Emirates
Facing a series of enforcement actions in the United States, crypto exchange Binance is turning its sights on the United Arab Emirates (UAE). The country is quickly becoming a primary focus for Binance due to its progressive stance towards digital assets and a clear regulatory path.
Binance Dubai general manager, Alex Chehade, cited the supportive stance of the UAE leadership towards crypto and their intent to establish the region as a pivotal point for Web3, as a means to diversify from fossil fuels.
Clear Regulatory Path and a Young Demographic
Chehade pointed out that the clear crypto regulations in the UAE make the region attractive for exchanges like Binance, currently dealing with legal disputes from U.S. regulators like the Securities and Exchange Commission, and the Commodities Futures Trading Commission.
“Binance is here [in the UAE] because we’ve been given the surety that we can set up operations and build for the future,” Chehade said. “You don’t want to set up where the goalposts move. For big businesses, you need predictability, you need to plan, and you need to budget.”
Another contributing factor is the influx of young expatriates moving to the UAE, enhancing the chances of rapid crypto adoption compared to other digital asset hubs.
Virtual Assets Regulatory Authority (VARA)
Chehade credited the UAE’s Virtual Assets Regulatory Authority (VARA) for the surge of crypto-related interest in the region. VARA is the world’s first virtual asset-specific regulator, providing detailed compliance guidelines for firms under its jurisdiction.
On February 7, VARA released its Full Market Product Regulations, which include four compulsory, activity-specific rulebooks for virtual asset service providers operating in Dubai. Binance received a preparatory minimal viable product license from VARA in September 2021.
Merkle Science CEO, Mriganka Pattnaik, shared similar views on the regulatory landscape in the UAE, stating, “There’s more interaction with the private sector and regulators because it’s a smaller, early-stage ecosystem. It’s also easier to hire teams in the UAE or just build out a team of 100 people, all of whom don’t come from the region.”
With a clear regulatory framework and a young, receptive demographic, Binance sees the UAE as the next major crypto hub, priming itself to capitalize on this shifting paradigm.