DIFC implements the first comprehensive legislation concerning digital assets
The Dubai International Financial Centre (DIFC) has pioneered the introduction of the world’s first Digital Assets Law, accompanied by complementary security measures. This groundbreaking legislation aims to provide legal certainty and establish a robust framework for investors and users of digital assets within the financial hub.
The digital asset industry, valued in trillions, has witnessed rapid expansion and holds considerable potential for future innovation. While many jurisdictions have focused on regulating specific aspects of these assets from a financial services perspective, the legislation enacted by DIFC transcends such limitations. It delves into the foundational legal attributes of digital assets, outlining the parameters for user and investor engagement.
Before this enactment, the legal status of digital assets remained somewhat ambiguous, with international rulings offering limited guidance. Through extensive research and public consultation, DIFC identified key legal inquiries and formulated a framework to address them.
The new Digital Assets Law (DIFC Law No 2 of 2024) provides a clear definition of digital assets as a form of property, elucidating how these assets can be managed, transferred, and dealt with by various parties. This legal clarity is anticipated to bolster confidence and increase participation in the digital asset market.
Moreover, DIFC’s efforts extend beyond the new law. Recognising the potential impact of digital assets on existing legal structures, the financial hub has revised several related laws, including the Contracts Law, Law of Obligations, Law of Security, Law of damages and remedies, Trust Law, and Foundations Law, to address specific issues arising from the digital asset landscape.
Jacques Visser, Chief Legal Officer at DIFC Authority, expressed, “DIFC is delighted to announce the enactment of its Digital Assets Law. We consider this legislation groundbreaking, as it is the first legislative enactment to comprehensively define the legal characteristics of digital assets as a matter of property law and to provide guidelines for how digital assets may be controlled, transferred, and dealt with by interested parties.”
The new legislation took effect on 8 March and is accessible to the public through the DIFC’s Legislative Database.
How can Sovereign assist?
Establishing a digital assets company within DIFC can be a complex process. Sovereign Corporate Services offers comprehensive support to any digital assets business establishing in the UAE and can provide direct access to government entities and regulatory bodies. We will provide guidance and expertise throughout the process and will review applications before submission to ensure that your structure meets all business and regulatory requirements.
