UAE’s Landmark Banking Law Integrates Crypto & DeFi into Central Bank Supervision.
By Banyong Fonyam Jonie Jr., Managing Partner, Fonyam and Partners Law Firm.
The United Arab Emirates has taken a decisive step toward establishing itself as a global leader in the digital asset economy with the enactment of Federal Decree Law No. 6 of 2025. This sweeping legislative reform brings cryptocurrencies, blockchain operations, decentralized finance (DeFi) protocols, and related digital-asset services squarely under the regulatory umbrella of the Central Bank of the UAE (CBUAE).
🔑 Key Provisions of the Decree
- Mandatory Licensing Regime:
All entities operating in or from the UAE dealing with crypto assets—including exchanges, custodial wallets, DeFi platforms, tokenized assets, stablecoins, and cross-chain bridges—must now obtain a license from the CBUAE. - Significant Penalties for Non-Compliance:
Unlicensed operations face severe penalties, including fines of up to 1 billion dirhams (approx. USD 272 million), underscoring the UAE’s serious commitment to enforcement. - Risk-Based Capital Requirements:
The framework introduces “Risk-Based Capital” rules, aligning digital asset firms with prudential standards similar to those applied in traditional banking. - Transition Period:
Existing market participants have a one-year grace period (until September 2026) to align their operations and secure the necessary licenses.
📈 Strategic Implications
This decree marks a strategic pivot from regulatory ambiguity to structured integration. By placing digital assets under the supervision of its central bank, the UAE is not merely regulating the sector—it is formally embedding it within the national financial ecosystem. This move is poised to:
· Enhance institutional trust and attract regulated capital
· Provide legal certainty for investors and innovative firms
· Position the UAE as a compliant, stable hub for blockchain-based finance
⚖️ Legal & Compliance Outlook
For firms currently operating in or considering entry into the UAE market, the message is clear: the era of unregulated experimentation is over. The CBUAE now expects full transparency, robust governance, and financial resilience. While the promise of faster licensing decisions is encouraging, the true test will lie in the consistent and rigorous application of these rules.
The UAE’s approach reflects a growing global trend: treating digital asset activities not as a niche novelty, but as an integral component of modern finance, subject to bank-level oversight.
🎯 Conclusion
Federal Decree Law No. 6 of 2025 is more than a regulatory update—it is a statement of intent. The UAE is methodically constructing a world-class digital asset jurisdiction, balancing innovation with investor protection and systemic stability. For the international crypto industry, this represents both a challenge and a significant opportunity.
At Fonyam and Partners, we are closely monitoring the implementation of this framework and are prepared to guide our clients through the licensing and compliance process.