The first Minimal Viable Product (MVP) license for Dubai was given to FZE on Friday, enabling full operation of the exchange in the area.
The operational license was granted to FZE by Dubai’s Virtual Asset Regulatory Authority (VARA) under the MVP program, which is, in the words of Helal Saeed Almarri, director general of the Dubai WTC Authority, “intended for secure and sustainable growth in Dubai.” The FTX FZE exchange is currently in the test phase of operations, with an emphasis on offering different crypto services.
Officials from Dubai claim that the activities of the subsidiary will act as a regulatory test for upcoming commercial services employing virtual assets.
Sam Bankman-Fried, chief executive officer of FTX, said that the recently approved exchange would run on a model that includes regulatory monitoring and Financial Action Task Force (FATF) compliance procedures tailored to Tier 1 international financial markets. Almarri further disclosed that future commercial services utilizing virtual assets will leverage the exchange’s activities as a regulatory experiment.
“The MVP Phase, exclusive to select, responsible international players like FTX, will allow VARA to prudently structure guidelines and risk mitigation levers for secure commercial operations,” said Almarri highlighting the region’s willingness for extensive crypto adoption.
With the license, FTX FZE is authorized to provide qualified institutional investors with regulated crypto derivatives products and trading services. The exchange is also capable of serving as a clearing house, running a nonfungible token (NFT) market, and offering custodial services in the area.
Soon after the authorities approved the virtual assets law and formed the Dubai VARA in March 2022, FTX was the first to get Dubai’s virtual asset exchange (VAX) license. The regulatory authorities in Dubai also granted the cryptocurrency exchange OKX a provisional license so that it may offer further services to local investors and financial service providers.
This year, Dubai and the rest of the UAE have moved quickly toward adopting cryptocurrencies. With the introduction of the Dubai Metaverse Strategy earlier this year, the emirates took their innovation wager a step further.
The focus of financial regulators on cryptocurrencies and the endorsement of significant exchanges are influencing regulators all around the world. While some nations are concentrating on tightening regulations, Dubai’s experimental approach and the recent approval of the European Union Markets in Crypto Assets proposal may serve as a model for other nations.