Dubai's Virtual Asset Regulatory Authority (VARA) has taken a significant step in bolstering its crypto-friendly status by issuing a "preliminary approval" license to WadzPay, a cryptocurrency company. This development represents the initial phase of WadzPay's journey towards securing a Virtual Asset Service Provider (VASP) license, a critical milestone for virtual asset services and activities.
The VARA license granted to WadzPay enables the company to commence preparations for offering specific virtual asset services and activities under the VASP license framework, specifically for transfer and settlement and broker/dealer activities. It's important to note that this VARA license does not encompass other virtual asset products and services that WadzPay might seek to provide. The company's platform caters to both business and individual users in the cryptocurrency space.
In recent months, Dubai's regulatory authority has been actively granting various licensing stages to cryptocurrency exchanges and firms, positioning the region as a crypto-friendly jurisdiction. The VARA licensing process in Dubai consists of three key stages: provisional approval, a minimum viable product (MVP) license, and an overall market product license. The intent behind these measures is to establish a robust regulatory framework for Virtual Asset Service Providers.
Notably, another cryptocurrency wallet called Backpack obtained a VASP license at the end of October, which limited its operations to cryptocurrency trading services within Dubai. This development coincided with the launch of the Backpack Exchange, which employs advanced technologies like zero-knowledge proof-of-reserve, managed multi-party computation, and high-speed order execution.
Additionally, Komainu, a joint venture involving Nomura and cryptocurrency firms CoinShares and Ledger, received a full operating license from VARA, marking the culmination of a ten-month journey through the VARA licensing process. This is another example of Dubai's growing embrace of the cryptocurrency industry, and it aligns with global trends of traditional financial institutions seeking to expand into the digital assets arena. Laser Digital, the cryptocurrency arm of financial giant Nomura, also secured an operating license from VARA in August, as part of Nomura's strategy to venture into digital assets. Furthermore, Binance acquired an operational MVP license from VARA to run a cryptocurrency exchange and offer virtual asset broker-dealer services locally.
