The first license to trade cryptocurrency in the Middle East has been granted to Regal RA DMCC (Dubai Multi Commodities Center), a gold trading company based in Dubai. Regal RA also has offices in Canada and the United States.
In a statement, DMCC Executive Chairman Ahmed Bin Sulayem said: “At the heart of DMCC’s long term strategic growth plan is the use of technology and innovation to disrupt and connect new markets, industries and customers. The announcement today embodies this approach.”
The license grants Regal legal legitimacy to store cryptocurrency in a vault at the DMCC headquarters, which is located in Dubai’s Almas Tower. According to a Bloomberg report, the coins will be kept in ‘cold storage’ (offline), and the physical devices where they are stored will be fully insured in the case of theft or natural disaster.
Plans for a Regulated, Legally Compliant Online Crypto Exchange Underway
The license will also allow Regal RA to legally develop and operate a cryptocurrency exchange. However, the exchange will cater to traders who see crypto as an investment rather than a payment instrument: “We look at them as a commodity not as a method of payment,” said manager Ksenia Kiseleva. “There is growing demand in the U.A.E. and worldwide.”
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Indeed, Reuters reported that the regulator of Abu Dhabi’s international financial center said that the center could possibly develop a legal structure for exchanges–a signal that crypto trading may be becoming hot in the Middle East.
Tyler Gallagher, CEO of Regal Assets (the company that owns Regal RA), noted that crypto traders are often wary of storing their crypto assets in ‘hot’ (online) wallets and exchanges–and rightfully so. The past few months have been rife with multi-million dollar exchange hacks, including the theft of $534 million in NEM tokens from the Japan-based Coincheck.
However, Gallagher believes that “we [Regal RA] have developed what we believe is the number one most secure way of investing in Bitcoin, Ethereum and other crypto-commodities.”
Despite growing interest in Dubai and some other areas in the Middle East, the central banks of Saudi Arabia and Qatar have both issued warnings against dealing in cryptocurrency.
If things go well in Dubai, though, Middle Eastern countries that are bearish on Bitcoin could be changing their tune in the near future.