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UAE emerging as global cryptocurrency hub, says industry expert

Mena region received over $271 billion worth of crypto between July 2020 and June 2021

The UAE is emerging as a global hub for cryptocurrency, said a top official from Kraken – one of the world's largest digital asset exchanges.

In April this year, Kraken became the first global cryptocurrency exchange to receive a full licence to operate a regulated virtual asset exchange platform in the Abu Dhabi Global Market (ADGM). Earlier this week, Kraken and RAKBank announced that UAE residents would soon be able to trade virtual assets in dirham using their local bank accounts.

Benjamin Ampen, managing director, Kraken Mena, underlined that the adoption of cryptocurrency in the UAE is growing fast.

"With Kraken, investors in the UAE and broader Mena region, for the first time, will be able to participate and invest in the crypto market more safely, more securely, more efficiently and at reduced cost through a dirham fiat gateway."

The UAE is the third biggest country in the world in terms of crypto adoption with 35 per cent already owning some form of cryptocurrency, according to a Gemini survey.

"Being able to invest in crypto directly, and to fund and withdraw from their Kraken account directly in dirham, regional investors and institutions can benefit from a frictionless trading experience and far greater access to the crypto market."

According to Chainalysis' 'The 2021 Geography of Cryptocurrency Report', the Middle East received $271.7 billion worth of cryptocurrency between July 2020 and June 2021, representing 6.6 per cent of global activity. The UAE, with transactions of $25.5 billion, was third behind Turkey and Lebanon.

Ampen noted that dirham-denominated trading would boost trade volumes in the UAE.

"The Middle East is one of the fastest-growing cryptocurrency markets in the world. UAE clients already use Kraken to transact well over a billion dollars in trading volume, and that's without a direct fiat onramp. Dirham trading pairs will enable Kraken to plug straight into the UAE's liquid capital markets, creating strong potential to see a significant increase in trading volume."

Ampen said that ADGM, a robust financial services centre, is an ideal and indispensable partner.

"Kraken has been thrilled to partner with ADGM who has been instrumental in making our vision to bring dirham crypto trading to the UAE a reality. The regulatory drive in the region has been highly progressive, visionary and forward-looking, typified by ADGM's Virtual Assets Framework, which continues to encourage adoption and innovation in emerging, technology-enabled investment strategies. We have been privileged to receive such great support and endorsement from them."

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Ampen pointed out that progressive regulatory reform, legislative action, and technology innovation put the UAE in a strong position to lead in the crypto market.

"The UAE's crypto strategy is one that is ambitious and compelling, yet one that is being progressed at great speed. By bringing a first to the region in allowing investors to access crypto trading directly in dirham, we want to help to increase activity, adoption, investment flows and awareness of the UAE's status as a fast-emerging global crypto marketplace."

Ampen added that Kraken wants to be a trusted partner to the UAE.

"This is an exciting opportunity for us to accelerate the adoption of cryptocurrencies in a region with such high potential. We strongly believe our proposition aligns with national interests and can help support the region's vision."