DIFC Enacts New Digital Assets Law for Legal Clarity

Dubai‘s tax-free economic zone, the Dubai International Financial Centre (DIFC), has introduced a new Digital Assets Law aimed at staying abreast of technological advancements and offering legal clarity to investors and users of digital assets.

Announced earlier this week, the enactment of this law, along with the introduction of a new Law of Security and amendments to existing legislation, is designed to enable the DIFC to adapt to the evolving landscape of technology in international trade and financial markets. It also seeks to provide a clear legal framework for stakeholders involved in digital asset transactions.

Following a thorough review of regulatory approaches adopted globally and a period of public consultation conducted last year, the DIFC’s Digital Assets Law came into effect on March 8.

As a jurisdiction established to foster financial services and attract global investment, the DIFC operates with its own legal system and courts rooted in English common law, distinct from the broader legal framework of the UAE.

Jacques Visser, Chief Legal Officer at the DIFC, remarked on the significance of this legislation, stating, “We consider this legislation to be groundbreaking as the first legislative enactment to comprehensively outline the legal characteristics of digital assets as a matter of property law, and to establish protocols for the control, transfer, and management of digital assets by interested parties.”

This move by the DIFC to modernize its property and securities laws to accommodate blockchain capabilities is expected to foster growth in digital asset and tokenization initiatives, potentially attracting more market participants to the free zone.