Caption: Jehanzeb Awan, CEO and Founder of J Awan & Partners with Henzelene Healley, Managing Partner of VA Consultants
From blockchain to banking, Jehanzeb Awan shares insights on tackling fragmented regulations, fostering innovation, and the critical role of compliance in today’s evolving financial landscape.”
Navigating the Complex World of Regulation and Compliance: Insights from Jehanzeb Awan
In a wide-ranging interview with Jehanzeb Awan, CEO and Founder of J Awan & Partners, we explored the complexities of regulatory landscapes, particularly within the UAE’s financial services sector, as well as the rising importance of governance, risk, and compliance in the world of emerging technologies like blockchain and Web3. With over two decades of experience in the UAE, Jehanzeb offered unique insights into the regulatory challenges and opportunities for businesses operating in this region and beyond.
See interview: https://youtu.be/gyUKfTaGJTs
The Journey Behind J Awan & Partners
Introducing his firm, Jehanzeb explained, “J Awan & Partners is a governance, risk, and compliance consulting firm, as well as a technology consulting firm. In addition to that, I founded a regtech platform called Accar, which provides our own regulatory technology software.” As a key figure in the Middle East’s crypto and blockchain community, he also chairs the Middle East Africa and Asia Crypto & Blockchain Association, whose founding members include Binance, Crypto.com, and MasterCard.
The association, as Jehanzeb highlighted, plays a vital role in promoting the Web3 community and fostering collaboration. “We do a lot of discussions, meetings, and educational initiatives to help businesses and governments navigate the complexities of emerging technologies,” he added. His consulting firm provides services to financial institutions, Web3 companies, and traditional businesses alike, helping them navigate regulatory environments, set up corporate structures, and develop compliance frameworks.
Navigating a Fragmented Regulatory Environment
One of the key regulatory challenges in the UAE, according to Jehanzeb, is the fragmented nature of the landscape. “In the UAE, you have multiple regulators: the Abu Dhabi Global Market (ADGM), the Dubai International Financial Center (DIFC), the Securities and Commodities Authority (SCA), the UAE Central Bank, and others. For a country of 10-11 million people, having five or six regulators creates confusion and adds cost.”
While this complexity provides opportunities for firms like J Awan & Partners to offer expert guidance, Jehanzeb believes the long-term solution lies in greater regulatory consolidation. “It would be nice to see more mutual recognition or passporting between these regulators,” he suggested. He drew parallels with the European Union’s regulatory approach, noting that a similar system in the GCC could ease cross-border business operations and reduce friction for companies.
Challenges in Web3 and Crypto Regulation
As the conversation turned to Web3 and virtual assets, Jehanzeb highlighted specific challenges facing these industries, especially in terms of regulation. “The biggest issue right now is around tokens, particularly stablecoins,” he said. “The UAE Central Bank has issued payment token regulations, but you also have regulations from ADGM, while other regions like Saudi Arabia don’t have anything yet. This fragmentation makes it difficult for businesses to develop a unified strategy.”
A key challenge Jehanzeb identified is the lack of an integrated platform where users can seamlessly manage both fiat and crypto assets. “From a commercial point of view, setting up multiple licenses for an app that allows users to handle both fiat payments and crypto transactions is costly. There needs to be a regulatory framework that talks to everyone and allows for that kind of interoperability,” he explained.
Caption: Jehanzeb Awan, CEO and Founder of J Awan & Partners with Henzelene Healley, Managing Partner of VA Consultants
The Importance of Compliance in the Web3 Space
Jehanzeb emphasized that many Web3 companies, driven by technological innovation, often overlook the critical importance of compliance. “A lot of people in the Web3 space come from a tech background, and they don’t fully appreciate the importance of compliance. Just because you can create a project on one blockchain or another doesn’t mean compliance works in the same way,” he warned.
He compared this oversight to a car driving with a flat tire. “If you don’t build compliance into your project from the start, it’s like trying to change a tire while driving. It’s not going to work,” he said. Startups, particularly in the financial sector, need to prioritize compliance from day one. “When you’re handling people’s money, the government’s job is to ensure there are systems and controls in place to protect those funds.”
Building Relationships with Regulators
When it comes to dealing with regulators, Jehanzeb stressed the importance of maintaining a cooperative and respectful relationship. “People often get scared of speaking to regulators, but they shouldn’t. Regulators know their rules, and you know your business. It’s not about ego; it’s about collaboration,” he advised.
He also highlighted the human dynamics involved in regulatory relationships. “If a regulator doesn’t like you, or if you can’t demonstrate that you’re serious about compliance, it can be a problem. Many challenges are not just regulatory—they’re about relationships,” he noted. Building rapport and showing a genuine commitment to adhering to regulations can make a significant difference when navigating complex regulatory frameworks.
Regulatory Complexity: A Double-Edged Sword
While the regulatory complexity in the UAE and the wider GCC region presents challenges, Jehanzeb noted that it also offers opportunities for firms like his. “The more complexity there is, the more help people need,” he said. However, he acknowledged that, in the long run, simplifying the regulatory environment would benefit both businesses and regulators.
Reflecting on the role of regulators, he added, “Regulators have a tough job. It’s thankless because if everything is going well, you don’t hear from them. But when something goes wrong, they are the first to be blamed.”
Looking Forward
As businesses increasingly adopt emerging technologies like blockchain and Web3, the role of governance, risk, and compliance will only become more critical. Jehanzeb Awan and J Awan & Partners are at the forefront of this evolution, helping companies navigate complex regulatory landscapes while promoting innovation in a responsible and compliant manner.
