Binance, the world’s largest crypto exchange, which has been granted a Virtual Asset License from Dubai’s Virtual Asset Regulatory Authority (VARA). As the UAE and region accelerates acceptance of crypto, we spoke to Richard Teng, Head of Binance MENA about their regional and global plans, recent virtual asset licenses, and what this means for the fast-evolving regional digital economy. Moderated by Karl Tlais, Strategic Advisor, Founder iAdvisory.
Here are some key insights:
✔ The MENA region is particularly important for the digital/crypto ecosystem because of its high youth population.
✔ Dubai has quickly pivoted, post Covid, to remote work culture which will attract global talent.
✔Schools are not adopting blockchain and crypto education fast enough. The Binance Academy has strong content that can be shared with governments and educational institutions.
✔ Binance has a strong culture and mandate to protect its users and data, which is one of the main reasons for its success, in both the B2C and B2B space.
✔ Institutional and Corporate adoption strategy of digital assets generally is still at very early stages in the region, and those that don’t get serious about this will lose out.
✔ Binance supports public private partnerships to promote the ambition of Dubai, by sharing its knowledge and expertise, as the government formulates frameworks to manage systemic risks.
Karl Tlais: What are your operational and regional expansion plans in the MENA region?
Richard Teng: On the global landscape, one third of the jurisdictions have put regulations in place, some are in the process of figuring out if and how to deploy in this space, whilst others are adopting a wait and watch attitude. In the MENA region, whilst many jurisdictions have not yet formulated their cryptocurrency framework, the region is favourable due to its young population that is already digital and crypto native. Regulators have the challenge of how to put in rules, encourage innovation and support the economy, and at the same time manage risks.
Karl Tlais: What products and services can Binance offer in the region?
Richard Teng: In Bahrain, we have already been able deploy quite a lot because Binance has a broad ecosystem and is not just a trading platform. We have NFTs, blockchain tokens, Binance Card and Binance Pay. We are the largest blockchain and infrastructure provider in the world with comprehensive products and services, including the largest crypto exchange globally. What we can offer in each region depends on what the regulators allow locally. We try to deploy as many of these verticals as possible, including things like custody, VIP customers and institutions.
Karl Tlais: How do you compare this region versus other markets?
Richard Teng: Every region has its own dynamics at play. Post-COVID, since remote working is more common, the UAE has pivoted strongly by encouraging and attracting global talent through various policies and visas. The leaders are very progressive in the way they think about the future and have embraced blockchain, crypto and Web 3, demonstrating their ambitions. This is exciting to players like us, and therefore we are here. I receive many enquiries for new projects daily, not only for this region but globally.
Karl Tlais: Yes, the UAE is at an inflection point, and can become an export hub for digital economy solutions. What is your strategy around talent acquisition and retention in the Web 3 space?
Richard Teng: As an organization, talent is the most important thing for us. The better the talent density in an organization, the stronger it will be. However, we are early players in the industry. Globally, there is about 5% adoption of Web 3 today, and less than 1% of traditional wealth being deployed in this sector. We are at a very early stage as crypto experts. We are recruiting many people globally, those in the Web3 space as well as people like myself who have been in traditional finance for almost three decades and have various kinds of expertise that can add value to the organisation.
Karl Tlais: What are your thoughts about increasing the literacy and awareness about this space for everyone?
Richard Teng: Most institutions and schools are still not imparting enough knowledge in this space. We have a strong Binance Academy with lot of content to help impart knowledge on crypto, web3 and blockchain to a global audience. We are also working with regulators and institutions to help build capacity and content for education.
Karl Tlais: How would you advice on crypto and virtual assets investments?
Richard Teng: Crypto is a technology, which does not stop but continues to evolve. There will be more innovation and new developments going forward. You must do your own research to invest in this space. You should not rely on influencers to be responsible for your money. I started investing in crypto around 2017-18, while I was a regulator in Abu Dhabi. For mass adoption, you need better regulations and institutional adoption.
Karl Tlais: Can you share your views on cybersecurity in this space?
Richard Teng: Protecting users is paramount to us, which is the main reason for our rapid growth. We have a state-of-the-art security system to make sure that all the systems are functioning well. We are also very stringent with our listings. If you look at the number of tokens, the list on Binance is less than what you see on some of the other exchanges. We have a responsibility to the users. We want to make sure that any listed tokens have a track record, a proper user base and proper community. They must meet a certain threshold and are not subject to easy manipulation. I think that is one of the key reasons for our success and our fees are the lowest in the industry.
Audience 1: What are your plans to expand into the Levant region?
Richard Teng: We have a strong team within the MENA region, but we are also working closely with different jurisdictions who wish to formulate their crypto framework to cater to crypto asset managers, crypto custody providers, broker dealers, exchanges, etc. We are very willing to share our knowhow and expertise such as how to do KYC in this space, how to monitor transactions, list wallets and make sure that you are dealing with the proper people, etc. These are the areas that regulators are most concerned about. We can demonstrate the capabilities of technology, which has more accountability and traceability in many instances than fiat currency.
Audience 2: What is your strategy in the region when it comes to institutional adoption?
Richard Teng: We will be working closely with institutions, corporates, VIP customers and those that need services on proper custody. We have state-of-the-art technology in terms of custody regulation and protecting users. Many of the institutions that you are looking at today, are still quite early in that process. Any big corporates and institutions today who have not started to examine this space or deploy the resources to understand this space, are going to lose out. Our strategy is quite simple. We will be here, get licenses in the respective jurisdictions, support not only the B2C space, which is extremely important, but the B2B space in terms of institutions, fund managers, corporates, family offices, high net worth individuals. We will work very closely with institutions.
Audience 3: What is Dubai’s mindset about this space?
Richard Teng: I do believe that UAE and Dubai is one of the most progressive governments in the world and believe in staying ahead of the curve. The Blockchain Institute here was set up here several years ago. They are embracing this space very aggressively. We look at how we can support the government further and share our expertise and knowledge so that this progressive regime manages the systemic risk, the AML risks well, but at the same time is able to support innovation and growth.