Ripple in talks for Gulf expansion after receiving in-principle licence from Dubai's DFSA

Cryptocurrency and blockchain solutions company Ripple has received an in-principle licence to operate as a payment services provider in Dubai and is now in talks to expand its footprint to other Gulf states, its top regional executive has said. The San Francisco-based company said it is the first blockchain-enabled payments provider to receive such a licence approval from the Dubai Financial Services Authority, the regulator of financial services for the Dubai International Financial Centre. Ripple currently has partnerships with the DIFC and New York University Abu Dhabi in the UAE. “While our focus remains on the DIFC and the ecosystem of businesses it serves, we continue to evaluate opportunities across the GCC region and [we] are in positive discussions with other jurisdictions to expand our footprint,” Reece Merrick, Ripple's managing director for the Middle East and Africa told The National . Any expansion will prioritise regulatory compliance in order to support blockchain adoption in the financial services industry, as the advancement of crypto-enabled cross-border payment frameworks “will provide the necessary confidence for banks and regulated entities to fully embrace this technology”, Mr Merrick said. “The DFSA authorisation marks a positive step in advancing financial inclusion across the region,” he said, noting it will address challenges including high fees and costs, long processing times and limited transparency in cross-border payments. The company will also offer crypto custody services, which provide storage solutions for digital assets, particularly aimed at investors holding significant amounts of cryptocurrency. Crypto custody services are considered fundamental to meet the needs of various market players interested in using crypto services and to capture new business opportunities in a market with ample room for growth, according to a study by consultancy PwC. “Custody is a key facet of the infrastructure required for enterprise crypto services, and one of the critical components to any crypto experience, making it a significant business opportunity,” Mr Merrick said. Ripple's users in the Middle East represent a fifth of its global customer base, Mr Merrick told The National in August . Ripple builds its products on the XRP ledger and uses XRPL's native token to facilitate cross-border payments. XRP is the seventh-biggest cryptocurrency by market capitalisation, with a value of more than $35 billion as of Tuesday, according to data from CoinMarketCap. Ripple's payments service has processed about 27 million transactions worth $50 billion, with payout capabilities in more than 80 markets, the company said. It holds more than 55 licences globally, including from the Monetary Authority of Singapore, the New York Department of Financial Services and the Central Bank of Ireland. The UAE aims to establish itself as one of the next high-growth crypto capitals of the world , with institutional investors, hedge funds and financial majors moving in and setting up operations in the country. Investors in the Emirates realised capital gains worth $204 million from cryptocurrency investments in 2023, data from blockchain data company Chainalysis found . In March 2022, Dubai also adopted a law to regulate virtual assets as part of efforts to support investors and streamline offerings from exchanges. It established the Virtual Assets Regulatory Authority under the Dubai Virtual Asset Regulation Law to provide international standards for virtual asset industry governance and enable responsible business growth. In February last year, Vara issued fresh regulations as the global cryptocurrency sector reeled from the collapse of several large platforms, including Celsius, Three Arrows Capital and FTX. These moves have attracted a number of major players in the global digital asset landscape. In August, Tether, the world's largest stablecoin, announced plans to launch a dirham-pegged stablecoin in the UAE, reflecting confidence in the country's cryptocurrency regulatory landscape . In April, the Dubai-based subsidiary of cryptocurrency exchange Crypto.com, Cro Dax Middle East, secured a full operational licence from Vara . “We are committed to fostering a future-focused financial ecosystem that supports innovation and growth,” Salmaan Jaffery, chief business development officer of the DIFC Authority, said on Monday.

Ripple in talks for Gulf expansion after receiving in-principle licence from Dubai's DFSA

Blockchain company aims to address challenges such as high fees, long processing times and limited transparency in cross-border payments