The Dubai International Financial Center (DIFC) announced the adoption of the Digital Assets Law and some amendments to several pieces of legislation. The initiative is designed to provide legal certainty to local investors and users of digital assets.
New digital asset regulations came into effect in the Dubai International Financial Center (DIFC). The new law ensures that the DIFC legislation aligns with the rapidly evolving international trade and financial markets.
The Digital Assets Law defines the legal characteristics of cryptocurrencies in terms of their control, transfer, and circulation. The new law significantly expands the possibilities of using digital assets for investment and international trade. In particular, the DIFC officially recognizes electronic records, facilitating the transfer of documents. According to the new legislation, some digital assets can also be recognized as money and will fall under the regulation of the relevant legal acts.
According to Jacques Visser, Chief Legal Officer at the DIFC, the law comprehensively defines the legal characteristics of digital assets in terms of ownership and is the first of its kind.
In addition to enacting the Digital Assets Law, the DIFC amended several other pieces of legislation to address some of the legal uses of digital assets. Specifically, the amendments addressed:
- the Contracts Law;
- the Law on Obligations;
- the Law of Security;
- the Law of Damages and Remedies;
- the Trust Law;
- the Foundations Law.
Visser stated that the law reflects the DIFC’s desire to align with global crypto market regulatory practices and encourage the development of advanced technologies in the region by creating a transparent and robust regulatory framework for digital assets.
The Dubai International Financial Center (DIFC) is a free economic zone and one of the largest financial hubs in the Middle East, Africa, and South Asia (MEASA). Its legal system is based on English law rather than UAE civil and commercial law. The DIFC has its own court of law. The main currency is the U.S. dollar.
In early 2023, the Dubai Virtual Asset Regulatory Authority (VARA) issued regulations for virtual asset service providers (VASP), and the DIFC began issuing licenses to companies in the Web3 and AI fields at a discount.
