The United Arab Emirates (UAE) is receiving high praise from major US-based crypto exchange Coinbase for its potential to become a “strategic hub” for the company. In a recent blog post, Coinbase emphasized the UAE’s status as a center of web3 innovation, considering the emirate of Dubai alone is home to nearly 500 startups and Hub71 in Abu Dhabi, which provides funding for critical blockchain infrastructure projects.
Coinbase has already initiated discussions with Abu Dhabi Global Market (ADGM) regulators as well as Dubai’s Virtual Assets Regulatory Authority (VARA) about the company’s activities within the UAE and the regulatory framework for cryptocurrencies. The crypto exchange believes that the UAE’s pro-crypto and pro-business regulations could help bring cryptocurrency to the masses, potentially reaching an ambitious target of one billion people worldwide.
In a notable announcement, Coinbase’s CEO, Brian Armstrong, along with other senior executives, are scheduled to visit the UAE soon. During this visit, they will be meeting with policymakers and regulators, with Armstrong also slated to deliver a keynote address at the inaugural Dubai Fintech Summit.
Coinbase has been making strides in global expansion lately, starting with the opening of a crypto derivatives exchange in Bermuda for non-US traders just last week. This move followed Armstrong’s statement in April that even relocating the exchange out of the US is not off the table, as a response to increased scrutiny from regulators in the States.
US regulators, including the Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission (CFTC), have significantly ramped up their scrutiny of the crypto industry throughout 2021. Many companies in the sector found themselves facing potential enforcement actions, with Coinbase as no exception. The SEC served the exchange with a Wells notice in March of this year, which is typically a precursor to legal action.
However, Coinbase’s possible expansion into the UAE market has its set of challenges to address. While the region’s pro-business regulations might be attractive, the company will need to navigate through the complexities of aligning with local rules and collaborating with regulators to maintain a positive relationship. The potential rewards are substantial, but so are the risks. The outcome of Armstrong’s upcoming visit will likely play a crucial role in determining the feasibility of this venture and the future of cryptocurrencies in the UAE.