A crypto staking specialist is trying to expand into the United Arab Emirates, becoming the latest firm in the market to do so.

Northstake has received preliminary clearance from Dubai's Virtual Asset Regulatory Authority (VARA), marking the first step towards obtaining a Virtual Asset Service Provider (VASP) licence, the business informed Blockworks.

This licence would enable the Denmark-based company to provide crypto custody services, such as custodial staking, to institutional investors in the emirates. It eventually intends to utilise the UAE as "a strategic base" to investigate expansion prospects.

According to Northstake CEO Jesper Johansen, the UAE is "becoming a global frontrunner in virtual assets." Interest in Dubai among crypto businesses has increased when the emirate formed VARA in March 2022—a regime industry insiders say encourages innovation in the segment.

"Our ambition is to contribute to the growth of the crypto ecosystem in the UAE, leveraging our expertise and innovative solutions in digital asset investments to support the region's financial institutions and our local partners on innovative digital asset products," Johansen said in a statement to Blockworks.

According to a September Chainalysis research, institutional investments worth more than $1 million accounted for around two-thirds of all cryptocurrency transactions in the UAE between July 2022 and June 2023.

"This market confidence validates the country's leadership's efforts to provide commendable regulatory clarity and establish the nation as a global crypto hub," Chainalysis' research director Kim Grauer said in a statement at the time.

Northstake is just the latest.

A cryptocurrency startup is expanding into the region.

Komainu, a cryptocurrency custodian, was one of the first to get a full VASP licence in August, while numerous others have since tried to offer services there.

Laser Digital, the cryptocurrency unit of Japanese bank Nomura, received a full crypto licence from Dubai's VARA the same month. M2 Exchange also got the capacity to provide custody and multilateral trading services to UAE residents around the same time.

The move comes nearly a year after Northstake secured $3 million to expand its institutional staking solutions. In August, the company teamed with Coinify to serve the firm's institutional and high net worth clients through its multi-chain platform, which includes yield-generating products.