This allows Binance to offer a range of Vara-approved virtual assets-related services to qualified retail and institutional investors in Dubai within Vara's regulatory framework for providers.
The MVP phase is exclusive to select international players, who will be allowed to carry out commercial operations under Vara's guidelines and risk mitigation measures.
“The Vara regime aims to strike an effective balance between value creation and risk mitigation, enabling open market innovation while assuring protection for the economically vulnerable,” said Helal Almery, chairman of Vara.
Binance was granted a provisional licence in March. The transition to an MVP licence means the company can open a client money account with a domestic bank and provide a range of services.
Following the licence upgrade, the company plans to offer a range of virtual assets services from exchange, conversion between virtual assets and fiat currencies, transfer of virtual assets, custody and management of virtual assets, virtual token offering and trading services and virtual assets payments and remittance services.
Binance plans to cater to clients approved by Vara, and users will benefit from increased levels of consumer protection by trading on a regulated platform under the supervision of Vara in Dubai, the company said.
“We strongly believe there is a significant opportunity to work with our industry peers to develop consistent implementation standards around the world as we have been doing in Dubai,” said Changpeng Zhao, founder and chief executive of Binance.
Binance has recently been strengthening its ties in the Middle East and Europe, after receiving in-principle approval from the Abu Dhabi Global Market to operate as a broker-dealer in virtual assets in the capital in April.
Founded in China in 2017, the company also secured regulatory approval from the Central Bank of Bahrain in March to operate as a cryptoasset service provider in the kingdom.
The company said the MVP licence from Vara is a major milestone that follows several registrations for its local entities in the Middle East and North Africa region and in Italy, France and Spain.
“Our registration in Dubai is a reflection of the country’s progressive stance on blockchain technology and its willingness to embrace this sector through collaboration,” said Alexander Chehade, Binance's Dubai general manager.
Vara was established in March 2022 under the Dubai Virtual Asset Regulation Law, the first law of its kind. The regulator aims to create an advanced legal framework to protect investors and set international standards for the industry.
In July, Dubai's government unveiled a metaverse strategy that aims to create 40,000 jobs and add $4 billion to the emirate's economy in the next five years as it continues to boost efforts to tap into the metaverse.
The initiative aims to cover all aspects of metaverse development, from formulating regulations and developing applications to nurturing talent and determining ways for these solutions to be used by government entities.
Following the creation of a regulatory framework, over the past few months, a host of cryptotrading platforms have secured licences to operate in Dubai. These include CoinMena, Bahrain's Sharia-compliant cryptoassets trading platform; Binance, the world’s largest cryptocurrency exchange; BitOasis; Bybit and FTX Europe, among others.