UAE Introduces Comprehensive Framework for Digital Assets
The United Arab Emirates (UAE) has taken a significant step in regulating the cryptocurrency and blockchain industry by introducing a new central bank law. This legislative framework aims to integrate digital assets with the traditional financial system while ensuring stringent oversight.
What the New Law Entails
Under Federal Decree Law No. 6 of 2025, the Central Bank of the UAE (CBUAE) will oversee digital assets, including cryptocurrencies, decentralized finance (DeFi) protocols, stablecoins, tokenized assets, and decentralized exchanges. Firms operating in these areas must obtain a license from the CBUAE, with existing companies given until September 2026 to comply.
The law features streamlined licensing processes, with decisions mandated within 60 days of application. Violators face severe penalties, including fines of up to 1 billion dirhams (approximately $272 million).
New Licensing Categories
To ensure compliance and promote innovation, the UAE has introduced new licensing categories:
- Virtual Asset Payments: Covering services like crypto payment gateways.
- Open Finance: Encouraging decentralized and transparent financial systems.
- Digital Wallets: Offering secure storage solutions for digital assets.
In addition to strengthening fraud protections, the law establishes fast-track dispute resolution for cases involving amounts up to AED 100,000. Islamic finance frameworks also get a boost, with regulations covering Shari’ah-compliant DeFi and tokenized Sukuk (blockchain-based Islamic bonds).
Commitment to Innovation and Oversight
The UAE’s updated regulatory structure demonstrates a proactive approach to fostering digital asset innovation. By providing legal certainty, the country continues its pursuit to become a global hub for financial technology advancements and Islamic finance in the digital age.
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Concluding Thoughts
With this new legislation, the UAE underscores its ambition to lead the digital era of finance. Businesses in the blockchain space should prioritize compliance to benefit from the nation’s forward-thinking financial ecosystem.
