UAE Law and Practice Contributed by: Stefan Mrozinski, Gabrielle Margerison (nee Lowe) and Arnold Krutilins, White & Case LLP
1. Fintech Market 1.1 Evolution of the Fintech Market Any views expressed in this publication are strictly those of the authors and should not be attributed in any way to White & Case LLP. In 2024, the UAE continued to reinforce its posi - tion as not just a regional, but also a global, finan - cial services hub with an even stronger push to develop and grow the UAE’s fintech landscape. There has been significant investment in fintech start-ups in recent years and the UAE now hosts a quarter of all fintech companies in the Middle East and North Africa (MENA) region. Accord - ing to industry reports, the potential impact of artificial intelligence (AI) in the Middle East is expected to be USD320 billion by 2030, with the UAE set to see the largest impact of close to 14% of 2030 GDP. The growth in the UAE’s fintech space has largely been driven by initiatives from the UAE’s two financial free zones: the Dubai International Financial Centre (the “DIFC” ) and the Abu Dhabi Global Market (the “ADGM” ). Both the ADGM and the DIFC have set up their own fintech hubs: the ADGM Regulation Lab (the “ADGM RegLab” ) and the DIFC Innovation Hub. The ADGM RegLab and the DIFC Innovation Hub give fintechs access to an extensive network of investors, marketing and PR exposure, bespoke regulatory frameworks and regulatory sandbox schemes, as well as networking events. In the words of the DIFC Innovation Hub, its objective is to “raise unicorns” . The success of the UAE’s fintech market can also be attributed to the continued entrepre - neurialism of the UAE’s regulatory authorities to position the UAE as a regional and international virtual assets leader. This is demonstrated by the
actions of the Dubai Virtual Assets Regulatory Authority (the “VARA” ) which released its all- encompassing regulatory framework for virtual assets in February 2023 and the UAE’s Secu - rities and Commodities Authority (the “SCA” ) which issued guidelines relating to the Regula - tion of Virtual Assets and Virtual Assets Service Providers in July 2024. In April 2024, the Central Bank of the UAE (the “CBUAE” ) published two key regulations on open banking and fintech innovation. The first was the Open Finance Regulation, which intro - duced an “Open Finance Framework” in which CBUAE-licensed financial institutions are man - dated to apply for licences. Under this arrange - ment, open finance providers (ie, the licensed financial institutions) will gain access to data of customers and will be permitted to initiate transactions on customer accounts and prod - ucts. The second was the Sandbox Conditions Regulation, which was issued to facilitate the testing of technologically innovative financial business models, products, services and solu - tions which may benefit consumers and/or the wider industry for a duration determined by the CBUAE without participants being required to obtain a full regulatory licence. In June 2024, the CBUAE published the Pay - ment Token Services Regulation (the “PTS Reg- ulation” ) which established a comprehensive framework for licensing and supervising digital payment services and covers: • payment token issuance; • payment token conversion; and • payment token custody and transfer. In April 2024, Dubai announced its “Universal Blueprint for Artificial Intelligence” , which is focused on increasing quality of life and GDP
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