Standard Chartered Crypto Firm Plots Abu Dhabi Outpost in 2023

Zodia Markets, the crypto spin-off of Standard Chartered, plans to expand into Abu Dhabi next year, making the emirate its first outpost in the Middle East and Africa, as it targets growth in all the regions.

Zodia Markets has drafted an application to operate in Abu Dhabi but plans to submit a new one in early 2023 after lengthy discussions with regulators.

Chief Executive Usman Ahmad said Financial news Abu Dhabi is attractive because it has been ‘forward-looking in terms of setting up the regulatory framework’.

Regulators in Britain, the US and Europe have taken a tough stance on crypto, but have been slow to establish formal rules for the sector. Of the three, only the European Union has developed a comprehensive framework on how to police the industry, which is expected to come into force in 2024.

The oil-rich United Arab Emirates is among a group of jurisdictions that have sought to take advantage. Abu Dhabi passed a regulatory framework for virtual assets in 2018, while Dubai passed legislation to regulate virtual assets in March.

The United Arab Emirates is now the fifth-largest crypto market in the Middle East behind Turkey and Lebanon, with a trading volume of around $28 billion, according to data from July 2021 to June 2022 compiled by Chainalysis.

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Abu Dhabi has already attracted crypto companies, including Kraken, the retail-focused exchange, which received a license to operate there earlier this year, and set up its regional headquarters in the UAE capital.

Competitor Binance also received approval in principle to operate as a broker in the emirate in April, while crypto billionaire Sam Bankman-Fried’s exchange FTX made a similar decision in Dubai.

Zodia Markets, which offers crypto trading for institutional investors, is one of two digital asset firms created by Standard Chartered. The other is Zodia Custody. Zodia Markets obtained its crypto asset registration from the Financial Conduct Authority in July and is applying for similar accreditation in the Republic of Ireland.

However, its main growth targets are in countries in the Middle East and Africa, Ahmad said, a move that will likely reflect Standard Chartered’s wider footprint in the regions. The bank has historically focused on emerging markets, and the Middle East and Africa accounted for £652m of its operating profit in Q3 2022, compared to £632m in Europe.

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Ahmad said Abu Dhabi’s existing regulations for crypto “allow businesses to have a certain degree of certainty with the framework in which they can operate. It lends itself to innovation without worrying about what’s next.” pass.

“We’ve been in talks with regulators there for some time,” he said, adding that the company feels “more confident about engagement there” than in countries that don’t. have not yet established clear standards for the crypto industry.

To contact the author of this story with comments or news, email Alex Daniel


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