Laser Digital, the cryptocurrency trading and servicing subsidiary of Japanese bank Nomura, has obtained a limited license to offer regulated over-the-counter (OTC) crypto derivatives from Dubai under the Virtual Asset Regulatory Authority’s (VARA) pilot framework.
With this new license, Laser Digital claims to be the first regulated entity under VARA to provide direct client-facing crypto OTC option services.
As interest in crypto derivatives grows globally, locations like Dubai, with their crypto-friendly regulatory environment, are becoming popular destinations for firms. For instance, the crypto derivatives platform recently acquired by Coinbase also has plans in Dubai.
“Crypto has become very Dubai-centered and there is this kind of hype around people moving into Dubai and the VARA regulatory environment,” said Johannes Woolard, head of product at Laser Digital in an interview. “It’s because Dubai does a good job. They make you justify, in a lot of detail, what you’re going to do, but once you’ve justified it, they’re willing to give you quite a long leash.”
Laser Digital is focusing on major crypto tokens, initially offering medium-dated options executed under ISDA agreements. The International Swaps and Derivatives Association is a trade organization for participants in the OTC derivatives market.
“It’s going to be vanilla structures, nothing complicated, just to grow that simple business and ecosystem. On top of that, you can build yield enhancement things, bring in the work that we do around borrowing and lending, and integrate the spot franchise. But initially, just keep it simple.”
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