Dubai’s first regulated crypto exchange targets institutional investors
- 18 Oct 2022
Inayat-ur-Rahman, Business Editor
The Middle East and North Africa is among the fastest growing market in the world for crypto adopters, with users based in the region receiving a total of $566 billion over the past 12 months according to a recently published industry report.
While the scenario paints an optimistic outlook for the crypto currency market with respect to crypto adoption from retail customers, one crypto exchange company that will begin its operations in Dubai very soon is focusing on institutional investors as part of its launch phase strategy.
FTX Exchange, the Middle East division of global crypto exchange platform FTX, was the first Virtual Asset Service Provider (VASP) to receive the MVP license to operate its virtual asset (VA) exchange and clearing house services from Dubai’s Virtual Assets Regulatory Authority (VARA). FTX Exchange has this been given the go-ahead to deploy regulated crypto derivatives products, and trading services to qualified institutional investors across the MENA region.
“This is part of our go-to market strategy in the region, working within the regulatory framework set up by VARA, and because FTX has a strong portfolio of institutional clients globally. We have a well-established reputation in the market amongst institutional investors as we are the most regulated exchange in the international market,” said Mohammad Hans Dastmaltchi, Chairman of the Board of FTX Exchange, who was one of the keynote speakers at the recently concluded GITEX Global event held at the Dubai World Trade Center.
According to Dastmaltchi, there is a strong appetite amongst institutional investors here in the UAE, from across a broad range of business sectors, such as finance, hospitality and real estate to name just a few. “As soon as we announced we were opening an office in Dubai, and were licensed to operate, we were inundated with inquiries. With regulatory frameworks now being established, institutional players are more interested to get on board and what you get from institutional investors, as opposed to retail investors, is a lot more stability in terms of investment. They have a long-term outlook which sucks out the volatility that we are seeing now from retail driven investments,” he added.
That said, Balsam Danhach, Head of Operations MENA, FTX, sees retail investors as part of their overall growth plans. “There is certainly a strong appetite in the market from retail customers as proven by the impressive growth of trade amounting to half a trillion dollars in the past year. So, this is something that we are also keen on tapping into and are confident it will contribute to our growth moving forward. What we want to focus on in the beginning is to establish the system and ensure compliance with the mindset that we are here, working with regulators, to protect customers, whether they are institutional or retail investors,” he explained.
Looking ahead, Danhach sees great potential for Dubai and the UAE to become the hub for digital assets in the MENA region, saying “the talent is here, the infrastructure is well set up, and the funds are available. The region’s young demographic will also be a key factor that will drive growth of digital asset adoption in the future.”
But beyond crypto assets as an investment vessel, Danhach believes digital assets will have a far larger impact on the local and international economy “with its potential as an instrument for cross-border trade and the transparency and safety that come with it as opposed to fiat currency.”