Gold trader gets Dubai license to trade and store cryptocurrencies

A collection of Bitcoin (virtual currency) tokens. (AFP)

DUBAI: Gold trader Regal RA DMCC has become the first company in the Middle East to be awarded a license by the Dubai Multi Commodities Center (DMCC) to trade in cryptocurrencies.
The license allows the company to store bitcoin, ethereum and other alternatives to the best-known digital currencies in a vault located in the headquarters of the commodities free zone, DMCC said in a statement on Tuesday.
The vault will have no connection to a network and physical devices are fully insured for the crypto-commodities market value against theft, hacking or natural disaster, it said. Crypto-commodities are those that trade in bitcoin.
Cybertheft is seen as a major risk for bitcoin trading, highlighted by last month’s heist of about $530 million from a Tokyo-based exchange, a theft rivalling Mt. Gox’s as one of the biggest for digital currency.
There have been increasingly loud warnings around the world about the dangers of investing in cryptocurrencies, which remain largely unregulated.
However, Regal RA DMCC’s announcement came as the regulator of Abu Dhabi’s international financial center said this week it could create rules for exchanges handling virtual currencies, in a sign that authorities in the UAE may allow trade in cryptocurrencies to develop.
Regal RA DMCC is a subsidiary of Regal Assets, an alternative asset firm which has offices in the United States, Canada and the UAE.
Dubai is a major hub for gold trading, thanks to its proximity to the world’s largest gold consumer, India.
“At the heart of DMCC’s long term strategic growth plan is the use of technology and innovation to disrupt and connect new markets, industries and customers,” said Ahmed bin Sulayem, executive chairman, DMCC.
Elsewhere in the Gulf, many regulators are wary of cryptocurrencies. The Saudi Arabian central bank has advised people not to trade bitcoin, and last week, Qatar’s central bank told banks not to deal in any way with cryptocurrencies.