The launch of a new digital asset service by Emirates NBD’s digital banking platform, Liv, is a major step forward for the cryptocurrency scene in the Gulf Cooperation Council (GCC). This action is hailed by banking experts as a watershed in the region’s transition to widespread cryptocurrency usage.
As the UAE’s second-largest bank by assets, Emirates NBD’s foray into digital currencies marks a strategic shift toward integrating blockchain-based finance into the traditional banking framework. This initiative not only reinforces the UAE’s ambition to become a global cryptocurrency hub but also sets a new benchmark for financial innovation across the region.
Institutional Impact and Regulatory Framework
It is anticipated that Emirates NBD’s action may encourage other regional financial institutions to do the same, which might release a significant amount of institutional capital. Currently, less than 5% of the assets managed by GCC institutions—which oversee assets worth around $2.1 trillion—are bitcoin.
Liv’s crypto offering operates within the regulatory framework established by the Virtual Assets Regulatory Authority (VARA), adhering to stringent anti-money laundering (AML) and counter-terrorism financing (CFT) protocols. This compliance ensures a secure and regulated environment for crypto-fiat transactions, encouraging corporate treasuries and family offices to explore digital asset investments.
Seamless Crypto Integration
In partnership with Aquanow, a globally recognized virtual asset service provider licensed by VARA, Liv enables customers to buy, sell, and trade cryptocurrencies directly through its ‘Liv X’ app. Users may easily manage both digital and traditional financial assets on a single banking platform thanks to this connectivity.
To ensure robust security, cryptocurrency custody services are provided by Zodia Custody. This commitment to safeguarding digital assets is crucial in building customer trust in the rapidly evolving financial landscape.
Marwan Hadi, Emirates NBD’s Group Head of Retail Banking and Wealth Management, emphasized, “Offering cryptocurrency on Liv X is the next step towards the overall vision of Liv being a pioneer in innovation and excellence. With the highest crypto adoption rate in the UAE, we are keen to launch our own virtual asset offering to capitalize on this trend.”
Driving Market Growth
The GCC’s cryptocurrency market is projected to grow at a compound annual growth rate (CAGR) of 14.2% through 2027. Liv’s initiative is poised to accelerate both institutional and retail adoption across the region. According to Statista, the number of cryptocurrency users in the UAE is expected to reach 3.78 million by 2025, with a user penetration rate of 39.13%.
Phil Sham, CEO of Aquanow, highlighted the significance of the partnership with Liv, stating, “This collaboration exemplifies the UAE’s emergence as a global crypto hub. It showcases how banks and fintechs can work together to develop cutting-edge, secure, and seamless financial products that truly benefit retail customers.”
Liv’s primary user base, composed largely of millennials and Gen Z, stands to benefit from this integration, as the bank’s established reputation helps demystify cryptocurrency for younger demographics. By embedding digital asset trading into everyday banking, Emirates NBD lowers entry barriers for more risk-averse users.
Expanding Digital Banking Innovations
Having previously launched a number of innovative financial products, including Money Ahead Deposits that pay interest up front, Goal Accounts that automate savings, Digital Gold Investment Accounts, and Cashback Cards that offer rewards of up to AED 1,500 per month, Liv has been at the forefront of financial innovation. The bank further expanded its wealth management alternatives for younger investors in May 2024 by signing an agreement to provide tokenized real-world assets (RWAs) to its clients.
UAE’s Crypto Leadership
The UAE has established itself as a global leader in crypto regulation, with the founding of VARA in 2022. The country ranks third globally in cryptocurrency adoption, with 27% of residents holding digital assets. Dubai’s proactive regulatory stance has attracted over 1,000 blockchain firms since 2020, including major industry players like Binance and CoinMENA.
This larger growth tendency is supported by Liv’s cryptocurrency program, which increases market liquidity for retail investors. The UAE had a 42% growth in cryptocurrency transactions year over year, reaching $34 billion between July 2023 and June 2024, according to Chainalysis’ Geography of Crypto Report 2024. According to experts, incorporating bitcoin services into traditional banking may greatly increase these transaction volumes and solidify the UAE’s position as a major player in the global cryptocurrency market.
With Liv’s latest offering, the GCC region moves closer to a future where digital assets and traditional banking coexist seamlessly, paving the way for a more dynamic and innovative financial ecosystem.
