Cryptocurrency exchange Bybit, which has more than two million registered users, said on Monday it received an in-principle approval to conduct virtual assets business in Dubai, as the emirate strengthens its regulatory framework to embrace emerging technologies.
The company plans to set up its global headquarters in Dubai, offering a full suite of products and services under the emirate’s test-adapt-scale virtual assets market model.
Established in 2018, the Bybit offers crypto traders online spot and derivatives trading services, mining and staking products, and software support to retail and institutional customers around the world.
“Virtual assets such as cryptocurrency and blockchain have changed finance forever," said Dr Thani Al Zeyoudi, Minister of State for Foreign Trade and Minister in Charge of Talent Attraction and Retention.
"To stay ahead in this fast-changing industry, we are building a business-friendly ecosystem with robust regulations to attract, retain and enable high-growth companies … this is paying dividends in terms of the next generation FDI we are seeing coming in.
“This will create jobs and investment opportunities and consolidate our position as one of the world's most attractive places to live and work for those in virtual assets and Web 3.0 industries,” he added.
The Middle East is one of the fastest-growing crypto markets in the world. It received $271.7 billion worth of cryptocurrency between July 2020 and June 2021, which represents 6.6 per cent of global activity, according to Chainalysis data.
The Central Bank of the UAE does not presently accept crypto-assets or virtual assets as legal tender. The only legal tender in the UAE is the dirham.
Bybit says it is one of the fastest-growing virtual assets platforms, reporting a peak daily trading volume of $76bn in May last year.
It is the third most digitally visited virtual assets business platform in the world, the company has said.
“This in-principle approval is an extraordinary opportunity for Bybit to support the UAE and the wider region’s ambition to become a global virtual assets technology hub,” said Ben Zhou, co-founder and chief executive of Bybit.
Bybit’s new headquarters is expected to commence operations next month and it has started the process of hiring talent and transferring existing teams and operations to Dubai.
Dubai adopted a law earlier this month to regulate virtual assets as it seeks to tap into the fast-growing sector. The Dubai Financial Services Authority, the regulator of the emirate’s financial hub, has also published its regulatory framework overseeing crypto tokens, or cryptocurrencies, for public consultation.
On Monday, Singapore-based cryptocurrency exchange crypto.com also said it will establish its regional hub in Dubai.
“At a time of unprecedented change in the world, with new centres of growth and important financial markets emerging, there is ever greater demand for innovative cross-border investment mechanisms as well as long-term sustainable solutions,” said Eric Anziani, chief operating officer of Crypto.com.
The UAE government is taking several steps to establish a strong digital economy.
The digital economy contributes about 4.3 per cent to the UAE’s gross domestic product, which is equivalent to Dh100bn ($27.2bn), government figures show.
The world’s largest cryptocurrency exchange Binance also secured a virtual asset licence to operate in Dubai.