The United Arab Emirates (UAE) has enacted a comprehensive new Central Bank Law (Federal Decree Law No. 6 of 2025) that brings all digital assets and Decentralized Finance (DeFi) activities under the framework of banking regulation.
Key takeaways from the new law:
- Expanded Oversight: The law grants the UAE Central Bank (CBUAE) the authority to license all crypto and blockchain entities operating in or from the country. This oversight now explicitly covers:
- Virtual assets
- DeFi protocols (DEXs, lending/borrowing platforms)
- Stablecoins
- Tokenized Real-World Assets (RWA)
- Decentralized exchanges
- Wallets, bridges, and blockchain infrastructure
- Mandatory Licensing: All entities providing financial services via digital assets—including traditional banks, crypto exchanges, and blockchain protocols—must obtain a license.
- “Code is Not a Shield”: Legal experts emphasize that running open-source or decentralized software does not exempt a protocol from licensing requirements.
- Heavy Penalties: Unlicensed operations face severe fines, potentially up to 1 billion dirhams (approximately $272 million).
- Compliance Window: Existing players have one year, until September 2026, to comply with the new rules. New license applications are expected to take 60 days.
This regulatory shift follows the UAE’s official launch of the mBridge cross-border Central Bank Digital Currency (CBDC) platform, which recently facilitated a payment to China. The mBridge platform, co-developed with the Bank for International Settlements (BIS) and Chinese banks, aims to provide near-instant, low-cost cross-border payments, with plans for further expansion in 2026.
While the new law signals a major redrawing of the UAE’s regulatory perimeter, experts suggest it is still too early to fully gauge its impact on the Gulf nation’s position as a global crypto hub.
