To better regulate the growing fintech sector and ensure its growth, the UAE has established a fintech office. The UAE’s central bank has created the fintech office to create regulations for the financial technology sector.
“The aim of the office will be to position the central bank as the coordinating authority, as an author of prudential and market conduct regulatory requirements and as an enabler and facilitator of fintech activities in the UAE. It will ensure that financial innovation continues in the banking sector with the support and facilitation of the national authorities,” Mubarak Rashid Al Mansouri, the governor of the UAE central bank told the media at the Middle East Banking Forum in Abu Dhabi.
Al Mansouri clarified that the new UAE fintech office’s functions will not overlap with that of the fintech sandboxes created by the financial free zones. These sandboxes help fintech teams to work together and test fintech products before launching them.
Al Mansouri said told the local media that the government has noted that UAE fintech firms need better regulations to flourish. The UAE central banks objective, Al Mansouri said is to work with partners to ensure that fintechs come under UAE approved regulations. The new UAE fintech office will examine assets such as cryptocurrencies in the UAE.
The UAE is reported to be the home of one-third of all fintech startups in the MENA region. The number of fintech companies in the MENA region is expected to hit 1845 by 2022, an increase of 230 percent from the 559 startups in 2015.
The UAE has been the recipient of the bulk of venture capital funds invested in the region and fintech is one of the major investment sectors. In total, of $237 million has been invested in MENA fintech startups in 181 deals since 2015, of which 51 deals were made in 2019 alone, according to a report by Abu Dhabi Global Market (ADGM) and Magnitt.