Key Takeaways
- The DIFC’s Digital Assets Law, following a review of global regulatory approaches and public consultation last year, came into effect on March 8
- Legislation aims to keep the DIFC updated with tech advancements in trade and finance and provide legal clarity for digital asset investors and users.
The Dubai International Financial Centre (DIFC) has introduced a pioneering set of laws aimed at regulating digital assets, marking a significant development in the global financial landscape. The newly enacted Digital Assets Law, along with the Security Law and amendments to existing legislation, seek to provide legal clarity and keep pace with technological advancements in international trade and financial markets.
With over 5,000 residents, the DIFC operates as a tax-free special economic zone within the United Arab Emirates. The enactment of the Digital Assets Law, effective from March 8, follows a thorough review of regulatory approaches worldwide and a period of public consultation conducted last year.
According to Jacques Visser, Chief Legal Officer at DIFC Authority, this legislation is groundbreaking as it is the first of its kind to comprehensively outline the legal characteristics of digital assets under property law. It delineates how digital assets can be controlled, transferred, and managed by interested parties, providing a framework for investors and users in the digital asset space.
The Security Law, a considerably more extensive piece of legislation, replaces a previous law dating back to 2005 and its subsequent 2019 amendment. Drawing inspiration from the United Nations Commission on International Trade Law’s Model Law on Secured Transactions, the new Security Law aligns with international best practices and incorporates the Financial Collateral Regulations into its framework.
In addition to enacting new laws, the DIFC is also amending existing legislation to adapt to the evolving financial landscape, ensuring that its regulatory framework remains robust and in line with international standards.
