26 May 2023
Players in the crypto space are attracted to the United Arab Emirates (UAE) because the region not only has clear rules but is also “open to experimentation,” Ben Caselin, the Vice President and Chief Strategy Officer (CSO) at the crypto exchange Maskex, has said. Caselin also said the UAE and the Middle East’s perceived neutrality “opens doors” that crypto exchanges operating in the U.S. or the Asia Pacific region cannot enjoy.
The Maskex CSO also told Bitcoin.com News that the Middle East and North Africa (MENA) region’s emergence as one of the most sought-after investment destinations could be due to what he described as the shift of relationships. Such shifts enable “new hubs of power and innovation to emerge.”
With respect to stablecoins, Caselin said these are “hugely important” now and will remain so for the foreseeable future. However, in his written responses sent to Bitcoin.com News, Caselin acknowledges that stablecoins often rouse emotions, hence their issuance is best done in collaboration with “all the right stakeholders in a given region.” In his responses, Caselin also shared his thoughts on the ongoing artificial intelligence (AI) hype and U.S. regulatory woes.
Below are Caselin’s answers to questions sent to him via Telegram.
Bitcoin.com News (BCN): The UAE seems to be at the forefront of crypto regulatory innovation, with the Virtual Assets Regulatory Authority (VARA) providing investors, developers, and companies with clear rules. Besides regulatory clarity, what do think makes the UAE an attractive destination for talent and capital?
Ben Caselin (BC): Across the emirates that make up the UAE, there are opportunities. While a city such as Dubai is well-developed, it’s clear that there is still so much more room to grow and that comes with a certain excitement. From infrastructure and architecture to business and digitalization, the UAE is eager to innovate and open to experimentation. This is attractive to anyone with ambition and an entrepreneurial spirit.
BCN: Your company, Maskex, counts Sheikh Hamad bin Rakadh Al-Ameri, who is associated with a well-known sovereign wealth fund in Abu Dhabi, as its major shareholder. What do you think their reasoning is behind the strong faith in Maskex and crypto?
BC: While some foreign exchanges much larger than ours have publicly expressed interest in obtaining a license and engaging in this region, Maskex is first and foremost a Dubai-based exchange and we are proud to be deeply associated with Abu Dhabi and the UAE as we serve the wider region. In addition, founded only in 2021, Maskex still has a lot of room to grow which is attractive to any investor. Furthermore, it’s important to note that Maskex is not just a crypto exchange. In addition to the usual crypto products such as spot, perpetuals, margin, options, copy trading, staking and p2p, we also offer markets for both US and Hong Kong stocks and a wide range of real-world payment, OTC and banking capabilities to both retail and institutional clients. Simply put, Maskex is quite unique in its offering.
BCN: The UAE is sometimes seen as the neutral ground between the West and the Asia Pacific (APAC) region. What, if any, advantages do the UAE-based exchanges have over their Western or APAC peers when serving global customers?
BC: The UAE is highly respected across the region and beyond; from Saudi Arabia, Kuwait, Bahrain and Egypt, from Turkey to Uzbekistan, all the way to Indonesia, and so operating an exchange from the UAE with the right network of support behind it can open up a lot of doors that both U.S. and APAC-based exchanges would find hard to unlock. This is a good thing. I believe the industry is best served by regional consolidation, rather than global monopolization.
So if we can see high-quality exchanges independently emerge and consolidate across South America, North America, Europe, Sub-Saharan Africa, the Middle East and North Africa, as well as Central and South East Asia, the Far East, and the Pacific, then that’s probably better if we ever want to see the adoption of bitcoin and digital assets by the entire global population. And by adoption, I don’t just mean that people are able to gain exposure to global markets and participate in global finance and make their own free choices as to what currencies they would like to use in their day-to-day life, but I do also mean the adoption of a culture of self-custody and peer-to-peer payments. Regional consolidation marks the next phase of growth in the evolution of this industry.
BCN: As a regulatory-compliant centralized exchange, Maskex reportedly aims to provide the masses with financial anonymity and autonomy. How do you strike a balance between regulatory compliance and user anonymity, especially when the VARA states in the section “Prohibited Virtual Assets” that the issuing of privacy coins is prohibited in the emirate?
BC: Maskex will always need to strike a balance and may adopt different strategies per jurisdiction. Privacy can be placed on a spectrum and does not just refer to privacy coins. It may also refer to private banking, the ability for users to generate new addresses, or seamless on and off-ramps between fiat and crypto including the Maskex virtual card which allows users to pay for goods and services with USDT as their collateral.
BCN: Do you see stablecoins having a role in the future of crypto and Maskex planning to launch fiat-pegged stablecoins in the near future?
BC: Stablecoins remain hugely important and will no doubt remain so for the time being. Across the region, demand for USDT is soaring, so much so that demand can hardly be met. In addition to USD-pegged stablecoins, we can also expect to see more innovation around gold-pegged stablecoins, especially in the current macro environment.
Gold is a trusted store of value in this region, both culturally and historically, and it’s really only a matter of time before we will see the market for gold-backed stablecoins explode. We cannot disclose anything about any token that we might or might not issue, but it’s good to note that stablecoins are highly political in nature and are best issued in collaboration with all the right stakeholders in a given region.
BCN: According to a report by Chainalysis, the Middle East and North Africa (MENA) region is the world’s fastest-growing crypto adopter. In your opinion, what do you think are some of the factors driving crypto adoption in the region?
BC: The growth in the MENA region cannot be attributed to one single factor alone. Over the past decade a lot has changed, both in the region itself as well globally. From a high-level point of view, we could say that in the current macro-environment and the increasingly multi-polar world, all relationships are shifting allowing for new hubs of power and innovation to emerge. It’s time for the MENA region to come into the limelight now, not just on the crypto front, but generally across culture, art, business and technology. Having said that, I see enormous opportunities in Sub-Saharan Africa as well, as well as South America. Perhaps this decade belongs to emerging markets worldwide – and that’s a good thing as emerging markets already house over 85% of the world’s population.
BCN: Amid the recent artificial intelligence (AI) hype, a bunch of AI tokens have been grabbing the attention of traders. Many of them probably don’t have any real utility. According to you, does AI have a role in the Web3 space?
BC: AI is interesting but on the Web3 front it doesn’t interest me at all. People seem to forget that Web3 is just a buzzword rooted in the original intention to completely overhaul the world’s financial system and move towards a fairer form of money. It’s much less about gaming or meeting in virtual cybercafes and interacting with AI-powered NPCs. I’m focused very much on the empowerment of people in the real world. Having said that, AI is highly interesting for its potential to optimize education, health care, business operations, logistics, creative work and more – but putting AI and Web3 together is another recipe for aimless hype.
BCN: The European Union has approved its cross-jurisdictional crypto regulation framework Markets in Crypto Assets regulation (MiCA) for release in 2024. Do you think this path or that set by the likes of the UAE will prompt the U.S. to speed up the rollout of their own crypto regulations?
BC: No. Unfortunately, the US currently suffers from too many internal conflicts to even begin to provide any clarity at all. It’s good to see different countries around the world take charge of their own future, and eventually, when the US as a whole does come around, it might be on fairer terms for all.
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