Ripple, the prominent cross-border payments provider with its flagship XRP cryptocurrency, has announced that it is entering the UAE Markets after receiving the DFSA License on Thursday.
Coming as its first license in the Middle East, it will now be able to offer its cross-border crypto payments services in the global hub of Dubai, which is the centre of international trade and outbound finance with a $400bn+ market.
Notably, the move comes amid the reports that the US Securities and Exchange Commission (SEC) is moving closer to wrapping up the case against Ripple which is the largest known corporate holder of the XRP token. The lawsuit, going on since December 2020, centers around whether XRP— its native cryptocurrency—should be classified as a security under U.S. law or not.
What Ripple DFSA License implies for it
The Dubai Financial Services Authority (DFSA) introduced its Crypto Token Regulatory Framework in October 2021.
This framework was part of Dubai’s efforts to establish a clear and structured regulatory environment for digital assets, blockchain, and crypto-related businesses operating within the Dubai International Financial Centre (DIFC).
And now this license approval by DFSA will enable Ripple to offer its services within the Dubai International Financial Centre (DIFC), an economic free zone known for its progressive financial regulations and strategic role in the region’s economic ecosystem.
This comes after it has been engaging with DFSA for license approval since last year. Notably, it established its Middle East HQ in 2020, it has not been offering its payment solutions in the Dubai market till now.
The UAE has been rapidly establishing itself as a crypto-friendly jurisdiction, with Dubai leading the charge in fostering blockchain adoption through clear and forward-thinking regulations.
With its flagship product, RippleNet, and the use of XRP for cross-border transactions, Ripple has been revolutionizing the way money moves globally.
By securing this license, it further gains regulatory clarity, allowing it to expand operations while ensuring compliance with Dubai’s financial guidelines.
Reece Merrick, Managing Director for Ripple’s MENA region told Coingape News that “Ripple’s DFSA licence approval is a significant milestone and reinforces our long-term commitment to UAE as a key financial and innovation hub. Dubai and the UAE have rapidly established themselves as leaders in providing regulatory clarity for virtual asset services, and we view the UAE government and regulators as key enablers of our regional and global growth.”
“With DIFC serving as our hub for the Middle East and Africa, we are growing our team and scaling operations to meet the increasing demand for faster, more transparent, and cost-effective cross-border payments,” he said.
What This Means for Dubai’s Crypto Ecosystem
Dubai has been actively attracting major blockchain firms and fintech companies, with a vision to become a global Web3 and crypto capital.
Ripple’s entry into the market aligns with this goal and can bring several key benefits including:
1. With Ripple’s blockchain-based payment solutions now available in the UAE, financial institutions and businesses will now have access to faster, cheaper, and more transparent cross-border transactions.
This could further enhance Dubai’s standing as a leader in fintech innovation and can act as a boost for stablecoin transactions with the availability of Ripple’s own stablecoin (RLUSD).
2. Its partnership with traditional financial entities may encourage more banks and payment providers in the region to explore blockchain-based solutions. This could lead to an increase in the institutional adoption of digital assets in Dubai and beyond.
3. The UAE’s regulatory framework is often cited as one of the most advanced for digital assets. By welcoming a company like Ripple, Dubai is reinforcing its commitment to responsible crypto adoption, potentially attracting other major players to set up operations in the city.
4. The UAE is home to a large expatriate population that relies on remittance services. With its technology, cross-border payments could become significantly more efficient, reducing transaction costs and processing times for millions of migrant workers and businesses.
Market Impact
Following this news of gaining DFSA License approval, XRP Price has witnessed a modest surge of 3.24% , currently trading at $2.23. The cryptocurrency reached an intraday high of $2.26 and a low of $2.14 during this period. A critical report of SEC to conclude its case against Ripple is also driving the XRP Price.
This further aligns with the broader stabilization that the market is witnessing following the dip, with Bitcoin witnessing 3% increase – to trade at $83,500.
Thus, the market’s positive response to this development underscores investor confidence in its strategic expansion efforts and can further influence XRP Price.
Challenges Continue to Exist for Ripple
While DFSA license marks a significant step forward, the company still faces challenges on the global regulatory front.
The ongoing legal battle with the U.S. Securities and Exchange Commission (SEC) regarding the classification of XRP as a security remains unresolved though there are reports that SEC is moving forward to its conclusion soon.
Moreover, competition in the blockchain payments space is increasing, with other players such as Stellar (XLM), SWIFT’s blockchain-based solutions, and emerging fintech startups also vying for market dominance. Thus, to stay ahead, it will need to continue innovating and forming strategic partnerships within the UAE’s financial ecosystem.
As blockchain technology reshapes the financial landscape, the partnership between Ripple and Dubai could serve as a model for how cities can embrace digital assets while ensuring regulatory transparency and innovation.
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