Two new crypto tokens TonCoin (TON), and Ripple’s XRP have joined Bitcoin (BTC), Ethereum, and Litecoin as recognized crypto tokens by the Dubai Financial Services Authority (DFSA), the financial regulatory agency of the special economic zone, the Dubai International Financial Centre (DIFC).

One year since the launch of DFSA the crypto token regime and five crypto tokens can now be utilized by virtual asset firms within the DIFC. License firms will be able to incorporate XRP and TON into their virtual asset services. XRP and TON will be available for use by institutions located in the DIFC to accelerate faster, more efficient global value exchange.

Commenting on the acceptance of XRP in DIFC crypto token regime, Brad Garlinghouse, CEO of Ripple,  “Dubai continues to demonstrate global leadership when it comes to the regulation of virtual assets and nurturing innovation. It’s refreshing to see the DFSA encourage the adoption and use of digital assets such as XRP to position Dubai as a leading financial services hub intent on attracting foreign investment and accelerating economic growth. Ripple will continue to double down on its presence in Dubai and we look forward to continuing to work closely with regulators to realize crypto’s full potential.”

The recognition of TON comes a few days after TON set a world record for network speed. The TON team conducted a public test of blockchain speed. The developers reported that in 12 minutes of the experiment about 42 million transactions were performed, and the maximum speed amounted to 108,409 transactions per second.

Under the regime, firms in the Dubai International Financial Centre (DIFC) can apply for and obtain a license to provide financial services with Crypto Tokens in or from the DIFC. The DFSA’s regulatory regime is largely technology-neutral, allowing firms to provide a wide range of financial services with Crypto Tokens.

The framework is designed to accommodate firms who want to operate a Crypto Token market, provide custodial services, manage clients’ assets, establish or manage funds, or provide other financial services. The rules cover a wide range of risks relating to financial crime, technology, governance, custody, disclosure, market abuse and fraud.

Since its inception the crypto token regime has received enquiries from 100+ firms have inquired regarding operating a Crypto Token business, 5 Crypto Token variations were issued (a mix of funds and trading business). In addition one license to offer Investment Tokens was issued (to tokenize units of a fund);  and five crypto tokens have now been recognized.

DFSA will be launching its next set of proposals that will focus on custody; financial Crime; Staking for Proof of Stake (PoS) consensus mechanisms; and Fund Management

Swiss private Bank Julius Baer in a recent Bloomberg article announced that it will be expanding its crypto wealth management services in Dubai UAE. This will be the first digital assets service offering outside of Swtizerland by the bank.

As per the article, Julius Baer’s subsidiary JBME will apply for a digital assets license variation on top of its existing permissions in the Dubai Financial Services Authority (DIFC). This would allow the entity to arrange and provide advice and custodial services on digital assets such as Bitcoin, Ethereum and other cryptocurrencies.

This is not surprising given that in Julius Baer’s recent global wealth and Lifestyle report, it published that Dubai had risen to the seventh position demonstrating its remarkable success a a destination for the wealthy.

The city has emerged as the preferred choice for companies and entrepreneurs seeking a foothold in the Middle East and is highly favoured by expatriates. By providing an attractive tax framework, investment incentives, superior living standards, robust safety measures, excellent global connectivity, and top-notch infrastructure, Dubai is poised to maintain its position among the top cities in these rankings.

In addition in 2023, Julius Baer participated in the Dubai Fintech Summit, where Jonathan Hayes Head of Digital assets development at Julias Baer spoke on the bank’s digital asset strategy.

In its 2023 strategy report Julius Baer noted that in its strategic cycle 2023-2025 the bank would focus on scaling its business in key markets through organize and inorganiz growth as well an innovate wealth management through digital advancements.

In their stategy report the bank notes, “Over the next strategic cycle 2023-2025, Julius Baer forsaw an additional investment into technology of about CHF 400 million in total, on top of today’s investment budget, to be achieved incrementally and largely capitalised. Further to current investments in its alternative assets offering, such as private markets and real estate, the Group will explore the emerging, albeit volatile, class of digital assets, keeping a close eye on how it evolves and the opportunities it presents. Integrating digital assets into its holistic wealth management proposition will position Julius Baer firmly at the interface of digital assets and the fiat world. The Group is well-prepared to successfully navigate both its clients and its business through the disruptions decentralised finance will inevitably pose.”

This comes as the UAE and Dubai become a destination of choice for global crypto exchanges seeking licenses. Dubai earlier this year launched the first virtual asset regulatory authority in the world, and has witnessed the creation of a digital assets framework on a federal level through its Security and Commodities Authority.

DIFC has also been working heavily on its digital assets framework. In April 2023, The Dubai Financial Services Authority, the regulator of Dubai International Financial Centre,noted that it has a strong pipeline of digital asset companies and global hedge funds that are looking to set up in the emirate’s financial centre. The DFSA has yet to issue a licence in the cryptocurrency space and it may take longer for companies looking to set up a new business than for those already licensed by the regulator.