Islamic digital asset exchange company CoinMENA has secured a provisional license from Dubai’s Virtual Assets Regulatory Authority (VARA), fueling its regulatory compliance journey.
The VARA provisional license follows an EU license CoinMENA obtained in January this year and brings its number of digital assets licenses to three including its first from the Central Bank of Bahrain (CBB). The EU license allows the firm to service investors beyond its primary target market of MENA.
“Through our provisional license, we look forward to working with VARA’s progressive regulatory framework that aims to foster innovation by enabling a new, robust economic sector that further strengthens Dubai’s position as a global financial hub and continues to offer more products and services to our users in the region,” the cryptocurrency exchange platform said in a statement.
The digital exchange was launched in 2021 by Dina Sam’an, Talal Tabbaa and Yazan Barghuthi. It currently supports five countries (Bahrain, the UAE, Saudi Arabia, Kuwait and Oman), allowing users to transact using their local currency.
CoinMENA is one of two Islamic cryptocurrency exchanges licensed by the CBB, the other being Rain. CoinMena last September secured US$9.5 million in funding, backed by the likes of BECO Capital and Kenetic, among others.
Why Dubai?
CoinMENA’s regulatory foray into Dubai is not surprising. After all, the emirate has one of the most progressive climates for digital assets in the region.
In February this year, the Dubai government enacted Law No 4 of 2022 on the Regulation of Virtual Assets and subsequently established VARA. The legal framework, which covers both crypto assets and non-fungible tokens, do not apply to virtual assets in the Dubai International Financial Centre (DIFC). DIFC is governed by a separate set of frameworks issued by the Dubai Financial Services Authority (DFSA): the DFSA in October 2021 released regulations on security tokens. These proactive measures underscore Dubai’s ambition to position itself as a regional leader for blockchain technology.
It is clear that Dubai is aggressively courting blockchain entrepreneurs, investors and enthusiasts by establishing a welcoming environment. In fact, CoinMENA is among several digital asset exchanges to receive a provisional approval this month by VARA. Other players include BitOasis and Crypto.com.
More noteworthy is the fact that VARA last month jumped into the metaverse with the establishment of its Metaverse Headquarters in the virtual world of The Sandbox, becoming the first regulator globally to do so. It was an attempt to ensure that the regulator “is accessible to its industry in their environment, and facilitate collaborative engagement between global virtual asset service providers, industry thought leaders, and international regulatory authorities”.
“VARA represents a serious effort to build a new, powerful economic sector that contributes to the nation’s economy and creates new investment opportunities, and this is possible through the safe and modern regulatory solutions we envision,” said Sheikh Hamdan bin Mohammed, the crown prince of Dubai and chairman of Dubai Executive Council, when VARA made its metaverse debut.
Characterizing it as the beginning of a new phase in the Dubai government’s efforts to be future-ready, Sheikh Hamdan further expounded: “By expanding VARA’s resources to a borderless audience through the metaverse, Dubai is creating a prototype decentralized regulator model, inviting international thought leaders – global authorities, governance custodians, and industry shapers – to participate, exchange knowledge, and problem-solve collectively so that we enable the dynamic virtual assets sector to build economic resilience, accelerate social inclusion, and address environmental sustainability.”