Joining me is Zain Umer, CEO of CFC Mena and co-chair of the MFTA Policy and Regulations Working Group. Zain, welcome back to the show.
We're talking about 50 licenses now issued by VARA. What does that actually mean?
I think it's a validation of the approach the regulator has taken. We have to remember when VARA was first announced, it was a one-person crypto regulator — an approach nobody in the world had tried before. Many people didn't think it would succeed. And I think in the space of four years to go from license number one to license number 50, it's a validation of that approach and the success. And we're now seeing it replicated all over the world.
50 licenses — big number, very impressive. But only 39 firms are fully operational. What is that gap telling us?
For me, the gap shows how robust the system is. With a lot of other regulators, the minute you get your in-principle license, you commence operational activity. VARA has a huge focus on ensuring all firms are operationally ready to go live — do they have all the final checks and balances in place? Internal systems, software, and controls. That enhanced focus on operational readiness is what leads to a more robust ecosystem. Getting your license doesn't mean you immediately start serving customers. You have to validate your systems, controls, technology, and software first. We think this is reflective of a very robust ecosystem and the regulator doing things as they intended.
So getting the license is not the finish line.
It's the first milestone of the firm's journey. Think of it like a race — the first milestone is getting the license. Then it's being operational and ready to go. Then it's being fully supervised by the regulator under that framework. For many firms, the license is just the first step of the journey.
Dubai now has more licensed crypto firms than Singapore or Hong Kong. But VARA itself says the numbers aren't directly comparable. What's the right way to measure success here?
I do think the numbers are important because they show that when a firm is thinking about where to set up their next office or global headquarters — whether that's Hong Kong, Singapore, the EU under MiCA, or Dubai — more and more firms, particularly the leading firms from around the world, are choosing Dubai as their home and VARA as their regulator. I think that speaks a huge amount to the reputation VARA has built and how fair the framework is. Dubai also has a great business ecosystem and firms love to be here and operate from here. But I think the trend Dubai has set to become the crypto hub for regulated firms will continue, and the gap between Dubai, Singapore, and Hong Kong will continue to widen.
You were part of VARA from the very beginning. Four years in, what is VARA doing differently from other regulators?
VARA's approach and focus on operational readiness — truly understanding firms' systems and controls more than just their policies on a piece of paper — is a huge component. VARA's supervisory capacity is also strong. Once a license is issued, firms are subject to ongoing monitoring and have to make live and active returns on a regular basis. And the way VARA recruits has been fantastic — they hire industry experts from all around the world. The original team, which I was part of, and the team in place now, have come from backgrounds in traditional finance, virtual asset management, from the US, from Hong Kong, from Europe. The regulator's technical excellence in terms of the systems it uses and the team it employs are what really helped it stand up and lead the way globally.
The 50th license went to Tribe, a real world asset tokenization platform. Is that a signal of where VARA is heading next?
Real world asset tokenization has been the key theme of the recent narrative. Dubai has shown the world how real world asset tokenization can be a success through the real estate pilot. Tribe I was very fortunate to work with personally — we supported them with the license through CFC Mena. Their journey encapsulates the recent trend of more firms coming into Dubai, finding viability in their business approach, and working very successfully and closely with the regulator to achieve a license in a short amount of time. The first 50 is done. The next 50 will happen in an even shorter time. I think we'll reach 100 potentially in the next 18 months.
Looking ahead, what does Dubai's crypto ecosystem look like in the future?
I think we'll see a variety in the types of licenses, not just more numbers. More recently real world asset tokenization has been important. I think we'll see more emergence of financial products, particularly management and investment licenses, giving people more investment options and choices. The one thing VARA has shown through its pilot program is that it's very willing to remain at the frontier of new types of regulatory frameworks and enable innovation — whereas some regulators are interested in keeping the status quo. That willingness to engage on innovation and new concepts means we'll continue to see new products and initiatives launch from Dubai and be replicated around the world. Stablecoins, real estate fractionalization, dirham stablecoins — a lot of diversification is coming.
This is really big news. Thank you so much for joining me today, Zain. Congratulations — you were there from the very beginning.
Thank you. I was at VARA for number one. I've been on the outside supporting for number 50. And we'll be there for the next 50. Thank you so much.
