Revolut receives in-principle approval to offer crypto services in the UAE

Revolut has officially gotten past the first regulatory hurdle to offer crypto services in the United Arab Emirates. The fintech announced to its customers on Wednesday that Dubai’s Virtual Assets Regulatory Authority (VARA) has granted in-principle approval for its Virtual Assets Service Provider licence.

This opens a path to regulated crypto trading in the Arab world’s second-largest economy.

Once the firm secures VARA’s final sign-off, eligible UAE customers will be able to buy, sell, and hold digital assets through the main Revolut app and through Revolut X, the company’s standalone exchange, according to the company’s announcement.

Second UAE licence in two months

The approval for Revolut’s crypto services comes after an initial licensing approval in the UAE. In June, the Central Bank of the UAE handed Revolut its stored value facilities and category-2 retail payment services licences, which allow the fintech to run payments in the country.

Stored value facilities let users hold fiat, tokens, and rewards points for later use, while retail payment services cover cross-border transfers and merchant acquisitions.

Revolut stated that the two authorisations serve as part of a singular plan instead of two products. The payments firm aims to build a locally regulated financial platform in the UAE to serve all purposes.

Joseph Khair, head of Revolut Digital Assets FZE in the UAE, tied the approval to the emirate’s regulatory direction. He claimed the approval “lays the foundation for Revolut to introduce its trusted virtual asset services within a regulated environment,” adding that it supports VARA’s aim of building a “safe, transparent and innovation-driven” virtual assets ecosystem.

UAE’s VARA regulates the crypto sector

Dubai created VARA in March 2022 under the emirate’s Virtual Asset Regulation Law, the first local law written specifically for digital assets.

The regulator screens applicants on governance, ownership, financial resilience, technology, cyber security, risk management, and anti-money-laundering controls. It also keeps licensed firms under ongoing supervision.

VARA said last month it had issued its 50th VASP licence, and recent additions to that roster include Animoca Brands and prime brokerage provider LTP.

Revolut, founded in 2015 by Nikolay Storonsky, already runs crypto in the UK and across the European Economic Area, where the fintech serves more than 16 million crypto customers.

Europe suffers pullback, Revolut plans US entry

The UAE expansion lands while Revolut trims its crypto menu for European customers. Under the EU’s Markets in Crypto-Assets (MiCA) rules, the company will stop accepting Tether’s USDT deposits and later totally remove the stablecoin from eligible EEA accounts.

Affected users can sell or move their holdings before the services are cut off, and Revolut said the change will hit only some notified customers in particular European jurisdictions. Tether has not obtained MiCA authorisation in the EU.

The fintech is also looking to enter the US market. Reuters reported in June that the firm plans to open a US bank next year after filing for a national bank charter with the Office of the Comptroller of the Currency. The payments firm wants to build a platform combining FDIC-insured products, crypto trading, stablecoins, and multi-currency accounts.

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