Open Banking to Rocket UAE Crypto Transactions
Open Banking to Rocket UAE Crypto Transactions

Open Banking to Rocket UAE Crypto Transactions

6 june, 20222 minutes to read
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Being one of the fastest growing crypto currency markets in the world, the Middle East accounts for 7 per cent of global trading volumes with the UAE making up about $25 billion of transactions annually.

Following Dubai and Abu Dhabi’s regulatory policies covering virtual assets and crypto currencies, global stakeholders launched in the market: 33 per cent of UAE residents claim they have invested in crypto currencies, while 67 per cent of UAE consumers are keen on investing in crypto within five years. Still, there are challenges to the ecosystem that can be overcome by so-called ‘Open Banking’.

Firstly, by deploying open banking protocols with the use of industry-standard APIs, consumers would need to provide consent and authentication only once when starting their crypto journey. This guarantees a more secure experience for consumers as they are already used to their bank’s original app, while allowing consumers to connect numerous bank accounts to authorize payments or withdrawals of funds.

Secondly, open banking eliminates the need for traditional payment rails such as manual bank transfers or card payments, thus, shortening the time of transaction and reducing transaction costs.  Moreover, it helps to mitigate the market volatility and currency change from the time of purchase to the value reflected in the user’s account.

Besides, payment initiation services (PIS) for instant purchase of crypto currencies accelerate the process to near real-time, reducing the chance of missing investment opportunities while also benefiting from lower fees thanks to the opportunity to transfer directly to the recipient.

Moreover, the aptitude to verify a customer through open banking APIs speeds up the activation process and complies with regulatory requirements.  Through account information services (AIS) customer accounts can provide platforms with a better overview of a customer’s networth, debt obligations and spending behavior, coining the basis for personalized recommendations for purchase of assets, options trading, crypto lending, etc.

Last but not least, is the ease of payouts. AIS can seamlessly verify, and cross-validate customer accounts enabling smoother operations for the exchange and quicker settlements into a user’s bank account, leaving no room for operational delays brought by manual approval from banks every time a customer wants to cash out their digital currency or asset.

6 june, 2022
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