One of the world's biggest digital investment platforms, eToro, has secured approval in principle from Abu Dhabi Global Market (ADGM) to operate as a cryptocurrency broker in the UAE capital, setting it up to launch services in the Middle East.
It will allow the company, which has about 30 million users globally, to work in derivatives and securities, leveraging its platform built on social collaboration and investor education, Tel Aviv-based eToro said in a statement on Tuesday.
It is awaiting a subsequent approval from ADGM's Financial Services Regulatory Authority, which will allow it to establish its base in ADGM from where it will be able to offer its services across the region, eToro said.
The company, which recently opened its office in Abu Dhabi, plans to expand its local workforce, said senior executive officer for the UAE, Jason Hughes.
"The UAE has one of the most vibrant FinTech landscapes in the Middle East and Abu Dhabi one of the most sophisticated regulatory frameworks for digital assets," he said. "We look forward to working with the ADGM to obtain our full licence and, in turn, expanding our services to investors in the UAE and further afield."
ADGM, in collaboration with local and global regulators, has been working to build a robust framework to build a secure environment for cryptocurrencies and their related technology in the UAE.
Global crypto exchanges have flocked to the regulator to secure operating licences, as they seek to tap the potential of the Emirates' cryptocurrency market.
Binance, the world's largest cryptocurrency exchange in terms of trading value, received its in-principle approval from ADGM in April to operate as a broker-dealer in virtual assets in the UAE capital. On Tuesday, it won approval to join the minimal viable product programme of Dubai’s Virtual Asset Regulatory Authority.
Kraken, another major player in the crypto industry, secured its regulatory licence from ADGM in April. This was followed by a partnership with the National Bank of Ras Al Khaimah in July, as part of which the San Francisco-based company will offer UAE investors the opportunity to trade virtual assets in dirhams through their local bank accounts.
ADGM last year revealed plans to double the number of its cryptocurrency exchanges to expand online asset trading options for investors.
Although the cryptocurrency market is experiencing a challenging period — beset by a crash in prices, bankruptcies of notable exchanges and even job losses — crypto enthusiasts remain optimistic, arguing that the market is going through another cycle.
The entry of eToro into ADGM will add to the latter's "vibrant and trusted ecosystem of virtual asset trading venues, global exchanges and service providers", said Arvind Ramamurthy, chief of markets at ADGM.
eToro was founded in 2007 and has since developed a platform in which users can hold traditional assets such as equities, currencies, exchange-traded funds or commodities alongside newer ones such as cryptocurrencies and other emerging digital assets.