Dubai authorisations surge 31% in 2024 – highest number in two decades

The Dubai Financial Services Authority (DFSA) authorised 136 firms in 2024 — an increase of 31% that brings the total number of firms operating in the zone to 774, according to its annual report published on May 5.

It is the highest number since the country’s financial hub, the Dubai International Financial Centre (DIFC), was established in 2005. The DIFC operates as a special economic zone with independent legal and regulatory frameworks based on English common law. 

The DFSA said in its report that financial regulators in the United Arab Emirates (UAE) are focused on providing a “business-friendly environment” where firms can benefit from a “stable, predictable and globally recognised” compliance standards.

Big names in TradFi

The DIFC is attracting international financial services institutions, particularly asset managers, investment banks and other traditional financial (TradFi) services. The 2024 list of authorised firms includes global asset management brands, such as Rothschild & Co and State Street.

Speaking at a webinar, DIFC chief business development officer Salmaan Jaffery explained: “We are trying to intermediate the conversion of family wealth or savings into investable capital, which is then deployed into global financial and real assets.

“In the region, private enterprise represents 70% to 80% of regional economic output, and therefore the wealth has utility. In the past, most of it went overseas and globally but now there are opportunities and vehicles for that wealth to stay closer to home.”

Most major US banks have had a presence in the UAE for more than two decades and JPMorgan Chase, Goldman Sachs and Citigroup have been DFSA-authorised since 2006.

JPMorgan Chase first opened an office in Dubai in 2007, hiring employees for its investment bank, private bank and treasury and securities services divisions. The firm received in-principle approval to upgrade its banking licence to category one in 2023, allowing it to offer payments and corporate banking services.

Most recently in March, the US-banking giant backed UAE-based loan company Deem Finance with a $400 million securitisation facility. The project focuses on an asset-backed securitisation (ABS) aimed at strengthening its lending capabilities for consumers and small and medium-sized enterprises (SMEs) in Dubai.

The partnership received “unwavering support” and “regulatory guidance” from the Central Bank of the United Arab Emirates (CBUAE), said Deem Finance chairman Shehab Gargash, in a statement.

Digital assets destination

Meanwhile, cryptocurrency and digital assets companies are eyeing the UAE as the next jurisdiction destination. The UAE saw an influx of crypto groups apply for licences in 2024, including OKX, Crypto.com and Tether.

“One of the reasons why we had massive inflows [of crypto firms] into Dubai and the UAE is because there was this big void in North America,” said Jaffery at the DIFC.

“I just came back from the US in January and I’ll tell you, in financial and digital assets markets, the animal spirits are raging once again. But of course, the US has other issues, which is fragmentation in state regulations.”

Blockchain giant Ripple secured the first DFSA licence for real-time blockchain payments in the UAE on May 1. “Thanks to its early leadership in creating a supportive environment for tech and crypto innovation, the UAE is exceptionally well placed to benefit,” said Ripple’s Chief Executive Brad Garlinghouse, in a statement.

The CBUAE will launch a retail central bank digital currency (CBDC), known as the digital dirham, in the fourth quarter of 2025. The aim is to use the digital dirham for cross-border payments by distributing them through banks, exchanges, finance and fintech companies, according to the plan first published in 2023.

The infrastructure underlying the digital dirham — mBridge — was jointly developed by the central banks of the UAE, China, Hong Kong and Thailand. The first transaction through mBridge was executed in January 2024.

Compliance standards

Dubai is reviewing its compliance standards, particularly those around anti-money laundering and countering the financing of terrorism (AML/CFT). Currently, the UAE requires all exchanges, custodians, brokers and other crypto businesses to obtain a licence from the relevant authority. Outside the DIFC, the Virtual Assets Regulatory Authority (VARA) is responsible for licensing and regulatory compliance of crypto firms in Dubai, while the Securities and Commodities Authority (SCA) is responsible for the UAE-wide regulations.

The DFSA completed 17 consultation papers in 2024, including a paper focusing on regulating digital assets in the DIFC. Consultation paper 153 proposes amendments to the existing regulatory regime for crypto assets to allow the trading of retail crypto tokens. The proposed changes will halve the crypto token recognition application fee from $10,000 to $5,000, reducing costs for companies. In addition, the DFSA also plans to amend criteria and a definition for fiat crypto tokens.

Jaffery at the DIFC said it updates regulatory requirements for crypto and tokens every two or three years. “It is important that this space has rules and regulations,” he added.