Cryptocurrency in UAE
About twenty years ago, United Arab Emirates (UAE) was considered one of the nations to incorporate technology into its economy. They are one of the leading countries in the Middle East to apply digital transformation in the financial and real estate sectors.
As such, blockchain technology is not a stranger to UAE. Restaurants have been accepting crypto coins as payment for their goods and services. Blockchain has been taken at the national level as well. “Dubai Blockchain Strategy” was launched in October of 2016, when His Highness Sheikh Hamdan publicly announced that the said city in the country would be the very first to implement cryptocurrency in government transactions.
Now, as per Trading Platforms, here are the top 6 crypto exchange platforms in UAE:
Click the respective platforms for more information. Now, let us focus on the sixth one – Kraken.
What is Kraken?
This major crypto exchange platform can be said to be beginner-friendly. Users can easily buy, sell, and trade among the over one hundred twenty supported coins, which includes the top ones, Bitcoin (BTC) and Ethereum (ETH).
It was founded in 2011 in San Francisco, California but operates and has offices globally. Kraken also supports both individual and organizational investors.
New cryptocurrency investors may start with the exchange using the main Kraken system. On the other hand, advanced and professional traders may opt to use the Kraken Pro, a lower-cost version with improved futures system features.
The good thing about Kraken is that it is, as mentioned earlier, beginner and user-friendly due to its simple interface. It also has a high liquidity trade and supports about 120 crypto tokens.
However, it has higher trading fees when one is not using the Kraken Pro. Further, there are reported cases of losses due to hacking.
Kraken in UAE
Kraken, aUS-based crypto platform, has just expanded in the Middle East. After securing their license to administer the exchange platform in UAE, a regional Kraken headquarters will be opened in Abu Dhabi.
Curtis Ting, the company’s managing director for Europe, the Middle East, and Africa (EMEA), expressed during an interview with CNBC’s Mr. Dan Murphy that they are incredibly thrilled and excited to set up their operations in Abu Dhabi Global Market finally.
Once launched, Kraken will be the leadoff crypto trading system to provide straightforward financing and exchange in dirhams (AED) versus bitcoin, ether, and other digital currencies after they obtain an operating license from the country’s regulatory authorities.
Ting emphasized that their main goal is to secure access for the users globally, which is essential to ensure that the investors and crypto traders have full access to their local currencies.
Kraken, which was launched more than a decade ago and is now operating in as many as sixty countries, voiced out that the launch in UAE symbolized a more playful strategy in the money-making region. Based on the report of Chainanalysis, the Middle East is considered a nation with the fastest-flourishing cryptocurrency industry globally, having seven percent of the world’s trading volume.
For the record, UAE now transacts around USD 25B worth of cryptocurrency annually. In volume-perspective, it is 3rd in EMEA, under Lebanon, which is worth USD 26B, and Turkey, which is USD 132.4B. These data were from a study conducted by Chainalysis from July 2020 to June 2021.
In addition, Citi’s global head of financial technology and digital assets, Ronit Ghose, was interviewed during “Capital Connection” on CNBC. Ghose explained that having an increase in entrepreneurs in Abu Dhabi is due to more stable and clarified regulations at ADGM, both in Dubai and from the federal perspective.
Further, he was also amazed that a few of the businesses in the UAE were generated even during COVID, in the past one to two years. As per Ghose, UAE is now being established as a cryptocurrency and Web3 hub.
Kraken VS Competitors
Being known as the top crypto trading platform by volume, Binance has one of the most immense scopes in the Middle East, where digital currency is developing as the mainstream trading system.
It was licensed to operate in Abu Dhabi in the past weeks and is planning to gather about a hundred positions in the nation.
Another trading platform, Bybit, had also been approved to operate and open an office in Dubai last April. FTX, on the other hand, has also been licensed for digital asset operators in the same city and will open an office as well in the future.
Singapore and Hong Kong, financial centers in rivalry with Kraken, are also anticipating to generate an entirely regulated system for crypto exchange, looking to expand regulatory procedures to be appealing to investors and traders in a competitive condition.
On the Grey List
One may think that there is no problem with cryptocurrency institutions in UAE because they are superior. However, they are now under close watch due to growing international investigation for their lack of transparency in their asset flows, which may be considered illegal.
It was reported that cryptocurrency institutions in the country had been overwhelmed with demand to liquidate billion-worth of digital assets since Russia-based investors are looking for protection for their possessions. This includes Dubai’s asset market, during the Russia-Ukraine war.
In April, Financial Action Task Force, the world’s leading anti-money laundering watchdog, also added Emirates to its grey list. Hence, the country needs close observation. The UAE, along with Panama, Syria, and Turkey, is now required to be monitored for threats under money-laundering circumstances.
In the interview with CNBC, Ting agreed that they should be heedful of the Anti-Money Laundering and Know-Your-Customer and all compliance requirements.
Furthermore, Ting advised that trust must be added to the management provisions that the authorities are developing to ensure that if a user is revealed and has full access to the systems that provide crypto products, accountability for each is presented.