- Ripple plans to set up its business in the UAE as its CEO praises its regulatory clarity around the crypto landscape
- The UAE has also turned out to be a potential candidate as the international hub for Coinbase
Leading fintech company, Ripple announced that the company would be setting up operations in the United Arab Emirates. The announcement was made by the firm’s CEO – Brad Garlinghouse – at the Dubai Fintech Summit. In a Tweet, Garlinghouse stated,
“With 20% of our customers based in MENA and clear regulatory regimes being developed, it’s no surprise that Dubai is emerging as a key global financial hub for crypto innovation to thrive.”
The MENA region houses 20% of RippleNet’s key clients. This includes SABB, Qatar National Bank, Al-Ansari Exchange, RAK Bank, and Lulu Finacial Holdings. Ripple’s services are used mostly for cross-border payments from UAE, Saudi Arabia, and Bahrain to India.
Notably, Ripple is not the first entity to look at UAE as a base for its business operations. Several crypto entities including Binance – the world’s largest crypto exchange – have set up an office in the region. Coinbase, another leading American crypto exchange, has also shown interest in the region.
Brian Armstrong – Coinbase CEO – stated that UAE could become a crypto hub for the Middle East, and for regions in Africa and Asia. Additionally, the American crypto firm could up an international hub in the UAE.
Armstrong, in an interview with Bloomberg TV, stated that the firm wants “to set up an international hub that could serve the long tail of countries in the world.” The CEO also spoke about Dubai on his social media, stating,
“The UAE deserves a lot of credit for being forward thinking on crypto. First dedicated crypto regulator in the world, a clear rule book published (!), business friendly plus strong customer protections. Really enjoying my visit so far.“
The need for regulatory clarity
Most firms have cited the regulatory clarity in the UAE as one of the reasons behind the appeal. This stands in contrary to the regulatory environment in the United States.
Ripple has been in a legal battle against the United States Securities and Exchanges Commission (SEC) for over two years. The company came under the commission’s scrutiny because of the sale of XRP, which the SEC claims is a security.
The lawsuit would cost Ripple a whopping $200 million by the time it comes to an end, Garlinghouse stated in an interview with CNBC. Garlinghouse said,
“You have video footage of the chair of the SEC, as a professor at MIT, saying 75% of these digital assets are commodities. And now he says they’re all securities because he’s the head of the SEC and he’s seeking power and he’s putting power ahead of sound policy to grow an economy in the United States.”
Moreover, several crypto firms based in the USA have been sued by the SEC. Crypto exchange – Kraken had to pay $300 million in fines to the commission for its staking services, now discontinued as a result.
Coinbase, too, has drawn the attention of the commission for its lending services – Coinbase Earn. The commission sent a Wells Notice to the American exchange on March 22, 2023. This, in turn, resulted in Coinbase suing the commission demanding regulatory clarity for digital assets in the United States