- The UAE has introduced crypto licenses
- Hong Kong is another competitor
- The U.K. is ready to fill a niche
Amid the chaotic crypto regulation in the U.S., countries around the world are competing for the opportunity to become a global hub for the growing industry. The UAE, the U.K., and Hong Kong are fostering their efforts to become a leader in this process and attract as many crypto firms as possible. Everyone seems to understand now that crypto is the future of economy.
The UAE has introduced crypto licenses
On April 17, the Securities and Commodities Authority (SCA) of the United Arab Emirates announced it had started accepting license applications from crypto firms wishing to operate in the UAE.
Apart from the SCA license, crypto firms wishing to operate in the emirate of Dubai, need to obtain a license from the local Virtual Assets Regulatory Authority.
According to the statement, companies that are licensed to operate in the financial-free zones of the UAE do not need to obtain these two licenses. Such zones already offer financial incentives and independent regulatory framework to attract businesses, especially financial companies.
In February, Dubai released its Virtual Assets and Related Activities Regulations — a move designed to attract investment from crypto platforms. The emirate aims to become the region’s crypto hub. In February, the SCA also undertook the responsibility for supervising the virtual assets sector.
On March 20, Crypto.com, a crypto trading platform from Singapore, announced that it received a Minimum Viable Product (MVP) Preparatory License from Dubai’s authorities, which allows for approved licensees to test and develop their products and services for up to six months.
The virtual asset custodian Hex Trust from Hong Kong received the MVP preparatory license in November last year and launched its business in Dubai this February.
Binance, on the other hand, has not obtained its operational license so far, as Dubai authorities have requested the global exchange to provide additional management information before granting the license and allowing it to operate in the region.
Hong Kong is another competitor
While Gary Gensler of the SEC is cracking down on Algorand and other ICO era projects, Hong Kong officials spoke at the Web3 Festival — a virtual asset-focused conference that took place between April 12 and 15. Hong Kong representatives said that they are committed to crypto and the digital asset space.
While there is a crypto crackdown going on in the West, Hong Kong, following Singapore’s example, is counting on the digital asset industry to revive its battered economy. Huobi Global and OKX have revealed their plans to apply for licenses in Hong Kong and open branches in the city.
It should be noted that the Chinese are the ones who control most of the centralized exchanges in the crypto industry. Examples include CZ’s Binance, Star Xu’s OKX, Ben Zhou’s Bybit, Justin Sun’s Huobi, and Shawn Liiu‘s Bitget.
By opening another office in Hong Kong, centralized exchanges ensure a sort of hedge against the crypto environment in Singapore. After the crash of LUNA and 3AC, Singapore, which used to be the crypto market with the best potential, is becoming more cautious. As a result, there is a great opportunity for Hong Kong.
The U.K. is ready to fill a niche
The U.K. intends to become a “global hub for cryptoasset technology” and plans to introduce regulation within the next 12 months, said Economic Secretary to the Treasury, Andrew Griffith, on April 17.
The U.K. government will cooperate with the Financial Conduct Authority (FCA) to develop crypto regulation in a framework that will bring together existing financial asset laws and new crypto-specific rules.
According to Griffith, the FCA has already started regulating crypto firms under its existing powers, but the current regulation is insufficient.
The lawmaker mentioned the Financial Services and Markets Bill, currently going through Parliament. Covering stablecoins, it contains some crypto-related rules. The bill will enter force earlier than the planned crypto regulatory framework.
In the upcoming months, the Treasury will release a consultation document on crypto and stablecoins, analyzing the risks and benefits of such assets. An important issue is their potential use for illegal activities, including money laundering and terrorist financing.
The U.K. government hopes to strike the right balance between consumer protection and promoting crypto innovation. Its decision to move forward with cryptocurrency regulation is in line with similar developments in other countries, including Dubai, Singapore, and Japan.
