The Dubai International Financial Centre (DIFC), a leading financial hub in the United Arab Emirates, announced this week the enactment of its new Digital Assets Law, effective March 8.
This legislative development, alongside the new Law of Security and amendments to existing legislation, aims to align the DIFC with the latest technological advancements in international trade and financial markets. By providing clear legal frameworks for investors and users of digital assets, the DIFC seeks to maintain its competitive edge as a destination for global investment.
Operating within a tax-free special economic zone, the DIFC has its own legal system and courts, based on English common law, making it distinct from the wider UAE legal framework. The introduction of the Digital Assets Law is part of the DIFC’s strategy to enhance its legal infrastructure to support financial services and attract international businesses.
Framework for digital asset transactions
The DIFC’s Digital Assets Law was formulated after a comprehensive review of regulatory practices across various jurisdictions and following a period of public consultation last year. According to DIFC Chief Legal Officer Jacques Visser, this law marks a milestone as it clearly outlines the legal status of digital assets as property and details the methods by which these assets can be managed, transferred, and controlled by relevant parties.
The law’s comprehensive approach to defining digital assets and their legal handling is expected to make the DIFC a more appealing platform for digital asset and tokenization projects. By modernizing its laws to incorporate blockchain technology, the DIFC aims to stimulate innovation and growth within the digital asset sector.
Legal clarity for digital assets
The DIFC’s initiative to update its legal framework for digital assets reflects its commitment to providing a secure and transparent environment for digital asset transactions. The Digital Assets Law is designed to offer clarity and security to investors and users, ensuring the DIFC remains a leading financial center for emerging technologies.
