Demand for crypto and digital assets in GCC to rise manifold

Sajjad Ahmad, Gulf Today

The GCC is a very dynamic market and the demand for crypto and digital assets will accelerate in the near future, said Leon Smith, CEO and Founder of Digital Assets Exchange (DEX) during a press conference in Dubai.

He further said that the global trading volumes for crypto assets have increased year on year since its inception and the current market cap for crypto assets is Dhs250 billion for all crypto assets. The increase in trading activity on the crypto markets indicate that there is institutional participation.

DEX has secured in principle approval from the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) to operate a Crypto Asset Exchange as part of the wider digital asset regulatory ecosystem developed over the past year by the FSRA.

Leon Smith said: “This is a significant milestone achieved for DEX and we are excited to be a part of the United Arab Emirates’ (UAE) financial growth. It’s exciting to be a part of a regulatory landscape that will help shape the international digital asset exchange ecosystem and encourage institutional participation in digital assets as an alternative asset class.”

Currently, the four crypto currencies approved by the ADGM are Bitcoin, Bitcoin Cash, Ethereum and Litecoin.

DEX will provide a platform for both retail and institutional grade investors to invest through a fully regulated exchange into crypto assets in a highly regulated financial ecosystem. DEX will, subject to receipt of FSRA’s final approval, operate as a regulated Crypto Asset Exchange and Crypto Asset Custodian under the Operating a Crypto Asset Business (OCAB) framework as enacted by the FSRA that oversees all crypto asset and financial services activities in the Abu Dhabi Global Market (ADGM). The exchange will act as a fiat to crypto asset exchange with major international currencies being served as well as local currency pairings native to the UAE/GCC markets.

“The regulatory framework that has been enacted by the FSRA of ADGM sets a new benchmark for the regulation of digital and crypto assets on a global scale. DEX will provide a secure platform for our clients to trade crypto assets securely in a regulated environment,” added Smith.

Leading financial jurisdictions such as the United States as regulated by the Securities Exchange Commission have provided guidance as to how digital assets in the form of coins, tokens or other digital assets may be treated. However, as no statutory laws have been enacted by the US Congress as federal law it has left many primary stakeholders within the digital asset eco system conducting business in the United States with little to no surety as to how the financial regulatory authorities will regulate the digital asset eco system.

“The OCAB framework backed onto the Market Infrastructure Rules in the ADGM provides clear guidance as to how crypto assets are treated and represents an attractive regulatory framework for financial institutions to participate in that is congruent with regulatory principles that govern traditional financial markets and products.”

DEX embodies first in class operational capabilities, regulatory mechanisms and is positioned to be a leading regulated Crypto Asset Exchange attracting both local and global institutional investment into crypto assets. Subject to regulatory approval, DEX expects to provide full operational trading services to clients in 2019 in the UAE, GCC markets and globally.

The Financial Services Regulatory Authority (FSRA) & Abu Dhabi Global Market (ADGM) have provided clarity and reassurance. They have put in place a regulatory framework that provides direction on how crypto assets and digital securities are regulated.

DEX is an exchange operator and will have retail clients and institutional clients. For DEX clients, USP or value proposition is strengthened by the regulated environment that we and ADGM both provide. Many other crypto asset exchanges operating in the market are based in unregulated jurisdictions. The favorable tax environment is another incentive for the ADGM; the 0% corporate tax regime is an attractive proposition to institutional stakeholders that may conduct proprietary trading in the crypto asset market to potentially establish trading operations in the ADGM.

DEX will offer institutional investors, high net worth individuals and crypto funds with the ability to trade on a highly regulated exchange and to hold their crypto assets on their behalf as a regulated crypto asset custodian.

The compliance, market surveillance and measures taken to regulate the exposure of BTC to nefarious sources traded on the exchange will provide the highest level of regulation available in congruence with the regulatory framework employed by the Financial Services Regulatory Authority (FSRA)/ Abu Dhabi Global Market (ADGM).