On July 25, 2023, cryptocurrency exchange Rain, based in Bahrain, announced that it has been granted permission to operate in the United Arab Emirates (UAE) as both countries continue
their efforts to promote cryptocurrencies.
The Abu Dhabi Global Market has provided Rain with "financial services permission" to operate a virtual assets brokerage and custody service. Through Rain's entity in Abu Dhabi, UAE residents will have the ability to buy, sell, and hold virtual assets, including cryptocurrencies, using Emirati dirhams, as stated in a series of tweets by the company.
CEO and co-founder Joseph Dallago revealed on Twitter that Rain first inquired about obtaining this permission in 2018 after the Abu Dhabi Global Market released its virtual assets framework. Dallago also mentioned that Rain has entered into a partnership with an undisclosed local bank in the UAE.
It is noteworthy that the Abu Dhabi Global Market operates with a distinct regulatory framework compared to the rest of the UAE, and Rain already has an existing entity in the market.
Co-founder Yehia Badawy mentioned on Tuesday that local asset managers were initially hesitant to collaborate with cryptocurrency companies that lacked a domestic license, according to Reuters.
Importance of the Development: The UAE has been actively seeking to attract cryptocurrency firms as part of its economic diversification strategy. However, this push has faced challenges. The UAE has been accused of becoming a hub for wealthy Russians to liquidate cryptocurrency in response to the sanctions resulting from the invasion of Ukraine last year.
Emirati authorities are also working on strengthening the regulation of the cryptocurrency sector. In May, the UAE's Virtual Assets Regulatory Authority reprimanded Open Exchange for alleged "unregulated activity."
Furthermore, the crypto market crash last year has had an impact on the UAE's crypto ambitions. In February, the crypto exchange Kraken announced the closure of its Abu Dhabi office amid the market downturn.
Nevertheless, the UAE's crypto scene continues to show signs of growth. In May, the US crypto platform Coinbase visited the Hub71 tech ecosystem in Abu Dhabi and is considering further moves to the country. Coinbase is also a supporter of Rain.
It is worth mentioning that Bahrain also boasts a robust cryptocurrency scene and serves as the base for the regional exchange CoinMENA. In February, the Novotel Bahrain Al Dana Resort in Manama announced that it would accept payments in cryptocurrency. Photo by Jayson De Leon, Wikimedia commons.
