McHugh said VARA’s licensing process is “neither too hot nor too cold,” ensuring an approach that suits the needs of applicants and the market.

Over the past year, VARA has granted full regulatory approvals to major global crypto exchanges such as OKX, Crypto.com and Binance. These approvals are part of Dubai’s ambition to become a world-class crypto hub.

McHugh noted that Dubai is the most populous emirate within the United Arab Emirates (UAE), and said Dubai is competing for the title of “global crypto hub” along with other smaller Asian jurisdictions such as Singapore and Hong Kong.

Citing the “Golden Hair and the Three Bears” story as an example, McHugh stated that the application processes do not always go as expected. He stated that applicants think the process is going slower, while outsiders may think it is fast.

Therefore, he emphasized that he believes VARA has found the right balance and that they carry out an audit process suitable for their target audience. “It’s the just-right-quantity principle,” McHugh said.

VARA does not specify a specific time frame for how long crypto-related applicants will receive a license. However, representatives of two major exchanges told CoinDesk that obtaining a license involves months of regulatory review. This situation highlights the challenges and complexities in Dubai’s crypto regulation.

Additionally, VARA updated the rules on marketing virtual assets earlier this month, fining seven “entities” that did not have the necessary licenses.

“Our focus is on responsible licensing, auditing, compliance with anti-money laundering and terrorist financing, and customer protection,” McHugh stated. This is an indication of how meticulous and careful an approach VARA takes to the crypto industry.

McHugh also stated that during the Next Blockchain Summit in Dubai, more traditional financial institutions will start appearing at such events.

“The attention on the ecosystem means that in two or three years there will be more people in suits at such events, with senior executives from firms like BlackRock, Goldman Sachs and JP Morgan attending,” he said.

McHugh stated that he has worked in important financial institutions such as Goldman Sachs, Citibank, Fidelity Investments and Citadel in the past. He noted that these experiences have shaped VARA’s regulatory approach to the crypto market.

While Dubai’s VARA continues to attract attention for its regulatory role in the global crypto market, it is eagerly awaited whether other countries will move to a similar regulatory framework.