Dubai Unleashes Crypto Staking through Custody Services

Earn money with the top Binance exchange

Dubai Unleashes Crypto Staking through Custody Services

In a significant move to expand the scope of virtual asset services in the Emirate of Dubai, the Virtual Asset Regulatory Authority (VARA) has published a revised Custody Services Rulebook. The updated regulations permit staking from custody services, provided that the prescribed requirements of the amended rulebook are met. This change allows Virtual Asset Service Providers (VASPs) to offer staking without needing a separate license for VA Management and Investment Services.

Crypto Staking is Now Available in Dubai through Custody Services

VARA, the authority responsible for regulating crypto services in Dubai (excluding the Dubai International Financial Centre), has significantly changed its current legislation. This amendment allows VASPs licensed as custodians to provide staking services to their customers from the same legal entity. The provision of this additional service will not require a separate license for VA Management and Investment Services but will necessitate specific additional approval from VARA.

Furthermore, additional licensing and supervision fees will be payable in connection with the provision of this new service. This move aligns with the Emirate’s broader strategy to foster innovation and growth in the financial technology sector, ensuring that regulations are in place to maintain integrity and consumer protection within the crypto space.

Crypto staking is a process that involves holding a specific cryptocurrency in a digital wallet to support the operations of a blockchain network. It’s a form of proof-of-stake (PoS) consensus mechanism, where the creator of the next block is chosen based on the number of coins held and staked.

It allows individuals to earn additional income by participating in the validation process of transactions in the crypto ecosystem.

From Oil to Crypto

Once entirely dependent on oil, Dubai now has very limited reserves. Therefore, it has begun preparations for economic transformation, just like the rest of the United Arab Emirates (UAE), focusing its economy on other sources of income. As a result, Dubai’s GDP is now only 5% dependent on liquid gold. One step towards independence from oil extraction was the introduction of the first regulations governing the cryptocurrency market in 2022 and the creation of VARA.

Regulatory tensions in other parts of the world, including the USA and Europe, have led to increasing cryptocurrency companies moving to the UAE and Dubai. They cite very favorable tax conditions and stability, as well as the transparency of local regulations. The possibility of crypto staking is an additional nod and incentive towards them.

According to Alex Chehade, the General Manager of Binance Dubai, the UAE could become the primary destination for cryptocurrency businesses seeking favorable and transparent regulations.

Binance and Major Crypto Exchanges Are Now in Dubai

Last month, Binance, one of the largest cryptocurrency exchanges in the world, obtained an operational license for crypto services in Dubai. This week, Komainu, a custody service provider for crypto assets, announced obtaining a similar license.

«Dubai has a vibrant digital asset ecosystem and impressive talent pool, and we are proud to contribute to the growth of this innovative financial hub. Our presence and desirable regulatory status in the region marks another differentiator for us as we execute the next phase of our business,» Sebastian Widmann, the Head of Strategy at Komainu, commented.

The local market also seems to hold substantial promise, as evidenced by retail investors’ enthusiasm in trading activities. The increasing count of engaged traders in the UAE’s FX/CFDs market underscores this trend, with Investment Trends reporting that the number of traders in these financial instruments hit an all-time high of 49,000 in 2023.

Dubai Unleashes Crypto Staking through Custody Services

Source: Investment Trends

In addition to Binance and Komainu, other leading cryptocurrency companies such as Bitget, ByBit, and OKX have sought local licenses in the United Arab Emirates (UAE). This movement reflects a broader pattern among digital asset exchanges to establish a foothold in the UAE. In a related development, OKX has recently joined forces with Komainu to enhance the security of institutional crypto trading.

Source: ethereum.today

Показать больше

Добавить комментарий