Dubai, UAE – In a significant move showcasing Dubai’s crypto-friendly stance, the Dubai Virtual Assets Regulatory Authority (VARA) has bestowed an “Initial Approval” license upon crypto firm WadzPay. This decision propels WadzPay closer to securing a full-fledged Virtual Asset Service Provider (VASP) license, emphasizing the emirate’s growing prominence as a crypto hub.
A leap towards Dubai’s comprehensive crypto services
With this approval, WadzPay is set to embark on its preparations to provide an array of virtual asset services. Specifically, under the forthcoming VASP License for Transfer and Settlement and Broker/Dealer activities. However, it’s essential to note that the current VARA license confines WadzPay’s offerings. While the firm is a significant player offering a plethora of services to businesses (B2B) and individual users through its B2B2C platform, this license restricts them to only a subset of its virtual asset products and services.
Dubai has been at the forefront of crypto-friendly jurisdictions, having granted varied operational licenses to multiple crypto firms and exchanges in recent months. Its regulatory framework is built on a robust foundation, with comprehensive guidelines set for Virtual Asset Service Providers. For a crypto firm to fully operate within this framework, it must navigate a meticulous three-tier licensing process. The steps involve acquiring provisional approval, followed by a minimal viable product (MVP) license, and culminating in a total market product license.
Backpack and Komainu: VARA’s recent approvals
The virtual currency wallet, Backpack, made headlines last month when it received its VASP license from VARA. With this authorization in place, the firm introduced the Backpack Exchange to the market. However, similar to WadzPay’s current standing, Backpack’s license has its limits. It’s permitted to offer crypto exchange services within Dubai but is restricted from rolling out its other virtual asset services. The novel Backpack Exchange boasts advanced features, including zero-knowledge (ZK) proof-of-reserves, multi-party computation (MPC) for secure custody, and lightning-fast order execution capabilities.
Another noteworthy mention is Komainu, a collaborative venture comprising Nomura, CoinShares, and Ledger. After a diligent licensing journey, Komainu secured its full operating license from VARA, roughly 10 months after obtaining its MVP license in November 2022.
Established financial giants dive into crypto
Laser Digital, a crypto division under the expansive umbrella of financial titan Nomura, also earned its stripes with an operating license from VARA in August. This significant move underlines Nomura’s strategic thrust into the digital asset realm. Through its dedicated subsidiary, Laser Digital Middle East FZE, based conveniently in Dubai, Nomura showcased its VASP license. This permit enables the firm to extend a suite of services, encompassing brokerage, virtual asset management, and investment offerings within the emirate.
Moreover, Laser Digital’s licensure follows closely on the heels of Binance – the global crypto behemoth. Binance secured its operational minimum viable product (MVP) license from VARA, paving its way to provide crypto exchange and virtual asset broker-dealer services within the region.
the flurry of licensing activities and approvals in Dubai underscores the emirate’s commitment to fostering a progressive and regulated crypto environment. As traditional financial giants and budding crypto enterprises flock to the region, the future of digital assets in Dubai seems not only promising but also set on a trajectory of unprecedented growth.