The United Arab Emirates has introduced a sweeping regulatory overhaul that officially places decentralised finance and Web3 services under the supervision of the country’s central bank. The framework, outlined in Federal Decree Law No. 6 of 2025, has been in effect since September 16, 2025, and companies now have until September 2026 to comply with the new requirements or face significant penalties. The decree marks one of the country’s most comprehensive efforts to shape its digital finance landscape, extending oversight to platforms and service providers that previously operated without clear legal boundaries.
Crypto attorney and NeosLegal founder Irina Heaver described the legislation as a major turning point for the UAE’s digital asset sector. She noted that a wide range of entities—from DeFi protocols and liquidity-routing tools to middleware and tokenisation platforms—now fall within the regulatory scope if they facilitate payments, trades, lending services, custody, or other financial functions. According to Heaver, the long-standing argument that “we’re only code” will no longer exempt decentralised systems from compliance, signalling an end to the regulatory grey zone for many blockchain projects. Any platform interacting with stablecoins, real-world asset tokens, or decentralised exchanges may now need to apply for licensing under the Central Bank of the UAE.
The decree outlines detailed licensing expectations in Articles 61 and 62. These sections make it clear that any individual or business offering regulated financial services through digital, automated, or blockchain-based channels falls under the central bank’s jurisdiction. Enforcement powers have already taken effect, and violations can lead to fines of up to one billion dirhams—roughly $272 million—alongside potential criminal liability for continuing unlicensed operations. The UAE’s stance reflects a push to ensure that financial services operating on modern infrastructure remain subject to the same safeguards applied to traditional institutions.
Legal experts also addressed the confusion that circulated soon after the law’s announcement. Kokila Alagh, founder of Karm Legal Consultants, stressed that the legislation does not restrict self-custody wallets, and individuals remain free to store or manage their own crypto assets. She explained that the new regulations expand accountability for service providers rather than limiting personal use, countering early misunderstandings that suggested private wallets might face restrictions. Both Alagh and Heaver urged businesses to review their service offerings carefully to determine whether licensing obligations apply.
The UAE has spent recent years positioning itself as a global hub for blockchain innovation, and this new regulatory framework aims to balance that ambition with consumer protection and financial stability. By formally outlining expectations for DeFi and Web3 companies, the government hopes to encourage responsible growth while preserving users’ control over their personal assets. The coming months are expected to bring further guidance from the central bank as the transition period unfolds, paving the way for a more structured and transparent digital finance ecosystem in the region.
