Dubai crypto rush: What is making it the global crypto capital?

Sandeep Nailwal, who co-founded Polygon in 2017, relocated to Dubai two years ago, and joining him now are the co-founders of crypto exchange WazirX as India continues to see what Nailwal termed a 'crypto brain drain'.

Even as the govt, as well as the central bank in the subcontinent, remain opposed to legitimising crypto assets, the Middle East seems to be gearing to welcome digital token innovators as Dubai looks to be the crypto capital of the world. In fact, just a month after FM Nirmala Sitharaman imposed high taxes on digital assets, without announcing any legal status for them, Dubai adopted its first virtual asset law and established a regulator.

A new authority named the Dubai Virtual Assets Regulatory Authority or VARA was created and its objectives include promoting Dubai as a hub for virtual assets, attracting investment in Dubai’s virtual asset sector, and providing systems to protect investors in virtual assets.

This opened the floodgates and the biggies came calling. The world's largest crypto exchange Binance received in-principal approval from Abu Dhabi Global Market, even as its CEO, Changpeng Zhao, is eyeing Dubai for its global headquarters and his base.

Cryptocurrency exchange Bybit also has announced that it is shifting its headquarters from Singapore to Dubai on the same day that Singapore-based Crypto.com said it would establish a regional hub office there as well. The move comes as Singapore is tightening its regulatory grip on cryptocurrencies. The European affiliate of crypto trading platform FTX has also announced that its regional office will be in Dubai.

While the UAE is welcoming the world’s largest crypto companies, it’s also coming under increasing international scrutiny as it falters in combating money laundering. The focus increases on the emirate nation as it also becomes a 'favored' spot for rich Russians leaving Moscow amid the war and intensifying sanctions.