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.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
MATCH INFO
Uefa Champions League semi-finals, first leg
Liverpool v Roma
When: April 24, 10.45pm kick-off (UAE)
Where: Anfield, Liverpool
Live: BeIN Sports HD
Second leg: May 2, Stadio Olimpico, Rome
MATCH INFO
Manchester United v Manchester City, Wednesday, 11pm (UAE)
Match is on BeIN Sports
How to donate
Send “thenational” to the following numbers or call the hotline on: 0502955999
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Financial considerations before buying a property
Buyers should try to pay as much in cash as possible for a property, limiting the mortgage value to as little as they can afford. This means they not only pay less in interest but their monthly costs are also reduced. Ideally, the monthly mortgage payment should not exceed 20 per cent of the purchaser’s total household income, says Carol Glynn, founder of Conscious Finance Coaching.
“If it’s a rental property, plan for the property to have periods when it does not have a tenant. Ensure you have enough cash set aside to pay the mortgage and other costs during these periods, ideally at least six months,” she says.
Also, shop around for the best mortgage interest rate. Understand the terms and conditions, especially what happens after any introductory periods, Ms Glynn adds.
Using a good mortgage broker is worth the investment to obtain the best rate available for a buyer’s needs and circumstances. A good mortgage broker will help the buyer understand the terms and conditions of the mortgage and make the purchasing process efficient and easier.
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Selected fixtures
All times UAE
Wednesday
Poland v Portugal 10.45pm
Russia v Sweden 10.45pm
Friday
Belgium v Switzerland 10.45pm
Croatia v England 10.45pm
Saturday
Netherlands v Germany 10.45pm
Rep of Ireland v Denmark 10.45pm
Sunday
Poland v Italy 10.45pm
Monday
Spain v England 10.45pm
Tuesday
France v Germany 10.45pm
Rep of Ireland v Wales 10.45pm
Avatar: Fire and Ash
Director: James Cameron
Starring: Sam Worthington, Sigourney Weaver, Zoe Saldana
Rating: 4.5/5
Essentials
The flights
Return flights from Dubai to Windhoek, with a combination of Emirates and Air Namibia, cost from US$790 (Dh2,902) via Johannesburg.
The trip
A 10-day self-drive in Namibia staying at a combination of the safari camps mentioned – Okonjima AfriCat, Little Kulala, Desert Rhino/Damaraland, Ongava – costs from $7,000 (Dh25,711) per person, including car hire (Toyota 4x4 or similar), but excluding international flights, with The Luxury Safari Company.
When to go
The cooler winter months, from June to September, are best, especially for game viewing.
Wicked: For Good
Director: Jon M Chu
Starring: Ariana Grande, Cynthia Erivo, Jonathan Bailey, Jeff Goldblum, Michelle Yeoh, Ethan Slater
Rating: 4/5
WISH
%3Cp%3E%3Cstrong%3EDirectors%3A%3C%2Fstrong%3E%20Chris%20Buck%2C%20Fawn%20Veerasunthorn%3Cbr%3E%3Cstrong%3EStars%3A%3C%2Fstrong%3E%20Ariana%20DeBose%2C%20Chris%20Pine%2C%20Alan%20Tudyk%3Cbr%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%203.5%2F5%3C%2Fp%3E%0A
Jebel Ali Dragons 26 Bahrain 23
Dragons
Tries: Hayes, Richards, Cooper
Cons: Love
Pens: Love 3
Bahrain
Tries: Kenny, Crombie, Tantoh
Cons: Phillips
Pens: Phillips 2
The specs
Engine: 2.4-litre 4-cylinder
Transmission: CVT auto
Power: 181bhp
Torque: 244Nm
Price: Dh122,900
Mobile phone packages comparison
Farage on Muslim Brotherhood
Nigel Farage told Reform's annual conference that the party will proscribe the Muslim Brotherhood if he becomes Prime Minister.
"We will stop dangerous organisations with links to terrorism operating in our country," he said. "Quite why we've been so gutless about this – both Labour and Conservative – I don't know.
“All across the Middle East, countries have banned and proscribed the Muslim Brotherhood as a dangerous organisation. We will do the very same.”
It is 10 years since a ground-breaking report into the Muslim Brotherhood by Sir John Jenkins.
Among the former diplomat's findings was an assessment that “the use of extreme violence in the pursuit of the perfect Islamic society” has “never been institutionally disowned” by the movement.
The prime minister at the time, David Cameron, who commissioned the report, said membership or association with the Muslim Brotherhood was a "possible indicator of extremism" but it would not be banned.
