The UAE adopted a federal law that introduces systematic regulation of activities related to virtual assets and digital forms of money.
UAE President Mohamed bin Zayed Al Nahyan approved Federal Decree-Law No. (6), which establishes an updated regulatory framework for the Central Bank of the United Arab Emirates (CBUAE), financial institutions, and the insurance sector. The document contains more than 170 articles and significantly revises the country’s financial and legal infrastructure.
In particular, the new law creates a legal basis for regulating the digital asset market at the federal level. The document states that any operations related to the creation, transfer, storage, or use of digital assets are considered licensed financial activities. Regulatory authority is granted to the CBUAE.
Under CBUAE’s scope of regulation fall financial services operating on blockchain technologies and other digital platforms. Supervision covers payment solutions, infrastructure and decentralized finance (DeFi) protocols, payment tokens, as well as technological systems that support transaction processing and execution.
To conduct operations involving digital assets, market participants must obtain a CBUAE license. Key requirements include:
- ensuring financial stability;
- implementing effective risk management mechanisms;
- complying with regulatory procedures;
- protecting users from cyber threats and financial misconduct.
For the first time, the legal status of the digital dirham (CBDC) is formally established as a lawful means of payment, used on par with traditional currency. The CBUAE defines the technical parameters of the digital unit, rules for its issuance and circulation, and acceptable methods of transfer between market participants. The same liability rules apply to loss or counterfeiting of the digital currency as to physical banknotes.
The UAE is effectively transitioning to a model in which digital assets and CBDCs become an integrated part of the state-regulated financial system.
In a broader context, the law modernizes the regulatory framework of the financial sector and creates an updated governance architecture. Key changes include:
- clarification of the CBUAE’s powers, including expanded supervisory and regulatory functions, and strengthened oversight of compliance across all financial market participants;
- setting the CBUAE’s statutory capital at 20 billion dirhams to ensure financial resilience and the ability to respond promptly to systemic risks;
- updated requirements for banks, insurance companies, and other financial institutions, including standards for corporate governance, reporting, risk limits, and interaction with the regulator;
- introduction of a unified list of licensed financial services with clear definitions of activities that require the CBUAE’s approval, improving regulatory transparency and predictability;
- strengthening the macroprudential oversight mechanism aimed at timely identification and mitigation of systemic risks, including liquidity, capital, and concentration of large exposures;
- development of the regulatory framework for Islamic finance and Takaful insurance, including unified requirements for Sharia supervision, Islamic financing structures, and operations of related funds.
These changes establish a comprehensive and modernized legal foundation that reinforces the stability of the UAE financial system and supports its continued digital transformation.
Moreover, the adoption of the law creates a transparent regulatory environment for the crypto industry and related FinTech solutions. Clear definitions of digital assets and the digital dirham, along with unified requirements for service providers, create conditions for market development and help increase trust among investors and users.
In April 2025, three major financial institutions in the UAE unveiled a project for a national dirham-pegged stablecoin, with its issuance to be regulated by the CBUAE.
