Cryptocurrency exchanges and businesses are being attracted to the Persian Gulf region due to its progressive regulatory frameworks, according to Alex Chehade, the general manager of Binance FZE in Dubai. Chehade highlights regulatory certainty and clarity as key factors drawing startups and established industry players to the Middle East. He mentions Dubai’s Virtual Assets Regulatory Authority (VARA) and Abu Dhabi Global Market (ADGM) with its virtual asset framework as examples of regulatory bodies in the region that facilitate business operations. Additionally, Bahrain’s central bank’s acceptance of cryptocurrencies further contributes to the region’s appeal.
Chehade believes that regulators in other jurisdictions have yet to fully understand or dedicate the necessary resources to regulate the cryptocurrency landscape. Due to this lack of understanding or bandwidth, the Middle East becomes an attractive destination for events like GITEX and Future Blockchain Summit, as well as global companies seeking an environment that is conducive to doing business.
Moreover, Chehade emphasizes the importance of certainty for businesses in order to create long-term plans. The regulatory parameters established in the Middle East jurisdictions provide the needed framework for businesses to operate and thrive. In this regard, Binance FZE plays a significant role as an ecosystem enabler and the largest Web3 company globally. As a catalyst, Binance facilitates the establishment of Web3 companies and startups in the region, creating a healthy environment for both major and small players.
Notably, Binance FZE has been operating as a regulated exchange in Dubai for a year and a half. With ring-fenced custody and operations, it is segregated from the rest of Binance’s global operations. The company’s Dubai-based operation currently employs approximately 600 people, and it remains committed to fostering the growth of the cryptocurrency industry in the region.
In a similar vein, Akshay Chopra, the Vice President and Head of Innovation and Design at Visa, echoes Chehade’s sentiments regarding the progressive regulatory outlook in the region. As a board member of the MENA Fintech Association, Chopra highlights the forward-looking and inclusive approach to blockchain and crypto solutions. Regulators actively engage with the local blockchain community, institutions, startups, and entrepreneurs to develop an inclusive perspective on the future and ensure optimal positioning both as a market and as a regulator.
The Middle East and North Africa (MENA) region is proving to be the fastest-growing cryptocurrency market globally, according to research by blockchain analysis firm Chainalysis. The region has witnessed a significant increase in transaction volume, with users receiving $566 billion in crypto between July 2021 and June 2022.
The attractiveness of the Persian Gulf as a crypto oasis is fueled by the Middle East’s progressive and supportive regulatory environment. Its regulatory certainty and clarity, along with the presence of virtual asset regulators such as VARA and ADGM, make it an ideal destination for businesses in the cryptocurrency industry. As major exchanges and businesses continue to be drawn to the region, the Middle East is poised to become a significant player in the global crypto landscape.