Balanced Regulation Needed to Increase Cryptocurrency Adoption: Huobi MENA Co-Founder

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Huobi, one of the world’s biggest digital asset exchange, recently announced their plans to expand in the region with variety of services for UAE retail and institutional traders.

We interacted with Mohit Davar, Co-Founder, Huobi MENA to get more insights on the latest trends in cryptocurrencies including how to get started investing in digital currencies, risks associated, crypto adoption, regulations, challenges and tips to protect digital currencies.

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Here are the interview excerpts:

Many people are still not clear on how to jump into the cryptocurrency bandwagon. Can you explain in simple terms what is are required to get started?

You don’t need to be an expert to start buying cryptocurrency, but it’s important to understand the basics of cryptocurrency. Start with learning about cryptos by watching videos and reading the latest news.

Once you are ready, there are ample of options to buy cryptos using local money, but at the same time it’s crucial that cryptos are bought from legit sources. One of the cheapest ways to buy online is via Peer-to-peer platforms, however at the same time it is one of the most controversial ways. There are so many stories of buyers being robbed of their coins and money, stolen coins are sold, and some buyers never even receive their coins.

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We recommend buyers to purchase coins from established providers. Under Huobi OTC products, buyers can buy major cryptos using their credit / debit card instantly and will immediately receive the digital assets to their secure Huobi wallet.

Huobi is a digital assets exchange provider. What services do you offer?

Customers can use Huobi right from buying their first crypto currency to trade it on Huobi to buy other 350+ digital assets.

If a customer is interested to trade on the platform, they can avail of spot or margin trading facilities. For customers and traders, who want exclusive benefits and early access to tokens on their trading they can participate in products like “Huobi Prime” and “Huobi Fast-Track”. Huobi recently launched the All Star VIP Program, giving exclusive discounts.

What are the key risks involved with investing in cryptocurrencies vis-a-vis traditional assets?

I really think that there are two major risks:

a. Cryptocurrency is volatile
b. Second is security; users must be very careful with their wallets, and not disclose their account details and private keys to anyone.

5.2% of the UAE population holds some form of cryptocurrencies. What are some of the biggest challenges in cryptocurrency adoption?

Education and regulations are extremely crucial, unfortunately people are not fully aware about cryptocurrencies, the adoption percentage can drastically go up, if people are properly educated.

As cryptocurrency is gaining popularity, regulators around the world are trying to see how best they can have regulations around it. This is a very positive sign for our industry. We at Huobi, are regulated and licensed in Gibraltar, Japan and UAE (DMCC) and we welcome a balanced regulatory regime in other countries also.

From time to time we hear from central banks of different countries warning citizens of the risks with cryptocurrencies. What are your thoughts on this?

The current inherent volatility in the crypto markets is mainly what gives a lot of concern to the banks in terms of consumers losing money and the consequence thereof. However, this is no different to trading in stock or currencies, as such it is important that customers are educated to the associated risks and then they are able to make an informed judgement.

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The other concern is that crypto currencies maybe used inappropriately, however, a balanced regulation can address this and the developments happening in blockchain actually provide tools to make these transactions more transparent and traceable.

What are some of the most promising cryptocurrencies that is on your radar?

Bitcoin is probably the most popular, among all cryptocurrencies. Mainly because it was the first cryptocurrency and gained massive adoptability globally. Having said that Ethereum is very popular and it has more use cases than Bitcoin.

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A lot of other crypto projects are on ERC 20 (a technical standard used for smart contracts on the Ethereum blockchain for implementing tokens). In the last year, we have also seen an influx of stable coins which are linked to USD. This is getting very popular among the crypto community.

We don’t provide recommendations. We suggest users to do their own research and invest in the cryptos that they think are the best. At Huobi, we will help them to create their digital wallet, fulfil their order, keep their assets safe and bring them new and innovative ways of trading.

We see many incidents of users losing cryptocurrencies due to exchange hacks. What tips can you offer to protect digital currencies?

At Huobi, we have a user protection fund. The value of this reserve fund is about 20,000 BTC and its owned by Huobi Pro. The funds sit in an independent address and will only be used in case of an emergency (security breach) at Huobi and does not cover the loses which are caused by the users themselves.

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We also suggest users to park their digital assets with trusted and reputable crypto exchanges like Huobi. There are various offline hardware wallets also available to store the digital assets securely.

What are the expansion plans for Huobi?

Huobi is growing rapidly in different markets, we are one of the few exchanges in the world who embraced localisation. We have offices with local teams in Japan, Hong Kong, China, Singapore, Dubai, United Kingdom, United States, and just started operations in Argentina and Turkey. We want to establish fiat ramps, to enable consumers to acquire digital assets from their bank accounts.

On MENA region digital currencies intitiatives, Mohit commented: “We see the MENA region leading digital currencies going forward. Bahrain issued its 1st crypto asset exchange license and the UAE isn’t too far behind; the UAE Ministry of Community Development launched its blockchain payment gateway.

Governments, exchange houses, banks and financial services companies are increasingly looking to adopt emerging technologies such as blockchain to cut the costs of doing business.

The central banks of UAE and Saudi Arabia want to pilot a shared digital currency for cross border bank transactions, this is one of the 1st government led initiatives, which could revolutionize the remittance industry and build investor faith in cryptocurrencies. The initiative between the UAE and Saudi Arabia is a positive direction for the MENA region’s emerging crypto environment and more countries will probably follow the pursuit.”

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