Dubai Moves Forward with Crypto Adoption as WadzPay Secures VARA Initial Approval
On October 31, the Dubai Virtual Assets Regulatory Authority (VARA) gave “Initial Approval” to WadzPay signifying a noteworthy stride towards broadening crypto adoption in Dubai. The approval is part of WadzPay’s progress toward achieving a comprehensive Virtual Asset Service Provider (VASP) license, focusing primarily on virtual asset services and activities.
VARA’s initial approval enables WadzPay to prepare to present virtual asset services in two primary areas: Transfer and Settlement, and Broker/Dealer operations. While the license grants approval to these services, it specifies that WadzPay cannot introduce any other virtual asset products or services. WadzPay, known for its wide-ranging offerings, caters to business entities and individual users.
Dubai’s Regulatory Progression
Dubai has been a major player in establishing a favorable environment for cryptocurrency companies, highlighted by the issuance of multiple operational licenses to crypto exchanges and other related firms in recent months. With a comprehensive set of regulations for Virtual Asset Service Providers (VASPs), Dubai reinforces its position as a jurisdiction welcoming to crypto initiatives.
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“We are immensely honored to have received initial approval from VARA,” said Mr. Anish Jain, Founder and Group CEO of WadzPay in the press release. “This recognition reaffirms our commitment to delivering cutting-edge blockchain-based solutions that not only revolutionize but also adhere to the highest regulatory standards. We are grateful for the opportunity to contribute to the growth of the fintech ecosystem in the UAE.”
To obtain a VARA license, firms must complete a particular three-tier process: they must first secure provisional approval, then achieve a Minimal Viable Product (MVP) license, and finally attain a total market product license.
Recent VARA License Recipients
Backpack, a cryptocurrency wallet, achieved the VASP license in late October, leading to the launch of the Backpack Exchange. The license allows Backpack to focus solely on offering crypto exchange services within Dubai, omitting its other virtual asset provisions.
Backpack Exchange, in its quest for transparency and efficiency, has adopted technologies such as zero-knowledge (ZK) proof-of-reserves, multi-party computation (MPC) for secure custody, and a mechanism for rapid order execution.
Komainu, a collaborative enterprise between financial powerhouse Nomura and crypto firms CoinShares and Ledger, also celebrated the acquisition of a full-fledged operational license from VARA. After securing its MVP license in November 2022, Komainu accomplished the final step in VARA’s demanding licensing process nearly ten months later.
Expanding Crypto Operations in Dubai
In a separate but related development, Laser Digital, a cryptocurrency division of the global financial institution Nomura, received its operational license from VARA in August. This achievement aligns with Nomura’s strategic plan to solidify its foothold in the cryptocurrency sector. Operating under its subsidiary, Laser Digital Middle East FZE, located in Dubai, the firm revealed its VASP license. This authorization enables Laser Digital to venture into various sectors, including brokerage, virtual asset management, and investment services within Dubai.
Additionally, the world’s largest crypto exchange Binance secured an operational MVP from VARA, emphasizing its intentions to offer cryptocurrency exchange and virtual asset broker-dealer services within the locality.
As crypto adoption accelerates globally, Dubai’s commitment to promoting a crypto-supportive regulatory environment is evident. Through VARA’s rigorous licensing procedures, the emirate ensures a balanced approach, safeguarding investors while promoting innovation. With firms like WadzPay, Backpack, and Laser Digital making notable inroads, the future of crypto adoption in Dubai looks promising.