The UAE’s new central bank law, Federal Decree Law No. 6 of 2025, integrates digital assets and DeFi into the banking framework, empowering the Central Bank of the UAE to license all crypto and blockchain entities. This move strengthens regulatory oversight while imposing fines up to $272 million for unlicensed operations, positioning the UAE as a compliant crypto hub.
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UAE Central Bank Law 2025 expands oversight to virtual assets, DeFi, stablecoins, and tokenized assets.
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It mandates licensing for all entities, including decentralized exchanges and wallets, regardless of technology used.
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Penalties reach 1 billion dirhams for non-compliance, with a one-year grace period until September 2026.
UAE central bank law digital assets: Discover how Federal Decree Law No. 6 of 2025 regulates crypto, DeFi, and blockchain in the UAE. Stay compliant and explore opportunities in this evolving financial landscape. Read now for expert insights.
What is the UAE Central Bank Law on Digital Assets?
The UAE central bank law digital assets refers to Federal Decree Law No. 6 of 2025, which comprehensively regulates financial services involving cryptocurrencies, blockchain technologies, and decentralized finance within the UAE’s banking system. Signed in September 2025 and publicized recently, this law grants the Central Bank of the UAE (CBUAE) authority to license all entities operating in or from the country that deal with digital assets, regardless of the underlying technology. It replaces the previous framework, broadening oversight to include virtual assets, DeFi protocols, stablecoins, tokenized real-world assets, decentralized exchanges, wallets, bridges, and blockchain infrastructure, ensuring a structured approach to innovation and risk management.
How Does the New UAE Law Impact DeFi and Web3 Compliance?
The new UAE law significantly reshapes compliance for DeFi and Web3 players by requiring licenses for any entity providing financial services via digital assets, such as traditional banks, crypto exchanges, or blockchain protocols. This includes decentralized exchanges, lending platforms, borrowing services, wallets, tokenized real-world asset platforms, stablecoins, bridges, and other infrastructure supporting payments, custody, or tokenization. Legal experts emphasize that the principle of “code is not a shield” applies, meaning open-source software or decentralized operations do not exempt entities from licensing.
Marina D’Angelo, head of Europe at DLT Law, an international regulatory and legal blockchain advisory firm, notes that the law redraws the regulatory perimeter around digital assets. According to her statement to Coindesk, it remains to be seen how this will ultimately affect DeFi, but it signals a proactive stance by the UAE. Existing players have a one-year compliance window until September 2026, with new license applications processed within 60 days. Unlicensed activities face severe penalties, including administrative fines up to 1 billion dirhams—about $272 million—and potential criminal sanctions, underscoring the CBUAE’s commitment to financial stability.
This regulatory evolution positions the UAE as a leader in balancing innovation with consumer protection. By encompassing middleware and infrastructure providers, the law ensures comprehensive coverage, preventing regulatory gaps in the rapidly growing Web3 ecosystem. Data from global blockchain reports indicates that clear regulations like these can attract up to 30% more institutional investment, as they mitigate risks associated with unlicensed operations. Experts predict this could solidify the UAE’s role as a global crypto hub, fostering trust among international players while encouraging ethical development in DeFi and tokenized assets.
Frequently Asked Questions
What Entities Must Obtain a License Under the UAE Central Bank Law for Digital Assets?
Under Federal Decree Law No. 6 of 2025, all entities involved in financial services using digital assets—such as crypto exchanges, decentralized finance protocols, stablecoin issuers, tokenized asset platforms, wallets, and blockchain infrastructure—must secure a license from the CBUAE. This applies to operations within or from the UAE, with no exemptions for decentralized or open-source technologies, ensuring broad regulatory compliance.
Is the UAE Central Bank Law on Crypto and DeFi Effective Immediately for Cross-Border Payments?
The UAE central bank law on digital assets took effect upon signing in September 2025, aligning with the launch of the mBridge platform for cross-border CBDC payments. It enables seamless integration of digital assets into international transfers, reducing costs and settlement times, much like how mBridge facilitates instant transactions between the UAE and partners like China, promoting efficient global financial flows.
Key Takeaways
- Expanded Regulatory Scope: The law covers virtual assets, DeFi, stablecoins, and blockchain infrastructure, requiring licenses for all relevant entities to operate legally in the UAE.
- Compliance Timeline: Existing players have until September 2026 to comply, with applications processed in 60 days; non-compliance risks fines up to $272 million and criminal penalties.
- Global Integration Boost: Paired with mBridge’s launch, it enhances the UAE’s position in cross-border digital payments, inviting more central banks to join by 2026.
Conclusion
The UAE’s Federal Decree Law No. 6 of 2025 marks a pivotal advancement in UAE central bank law digital assets and DeFi regulation, embedding these innovations firmly within the national banking framework under CBUAE oversight. By mandating licenses for a wide array of blockchain and crypto entities while introducing the mBridge platform for CBDC-based cross-border payments, the UAE demonstrates expertise in fostering secure, efficient financial ecosystems. As the nation eyes further expansions in 2026, stakeholders in digital assets and DeFi are encouraged to prioritize compliance to capitalize on emerging opportunities in this dynamic global landscape.
