The United Arab Emirates has introduced a sweeping new financial law that formally brings decentralized finance (DeFi), Web3 protocols, and supporting infrastructure under direct regulatory supervision.
Federal Decree Law No. 6 of 2025 — now in force — marks one of the most significant changes to the region’s digital-asset landscape, reports Cointelegraph.
According to Irina Heaver, founder of NeosLegal, the law places protocols, middleware, and even infrastructure providers within scope if they enable payments, exchange, lending, custody, or investment services. She warned that industry teams should treat this as a critical deadline and align systems before the September 2026 transition period expires.
“Just code” no longer shields DeFi platforms
The law centers on Articles 61 and 62, which require licenses from the Central Bank of the UAE (CBUAE) for any entity offering regulated activities “through any means, medium, or technology.” This eliminates the long-used defense that DeFi platforms are merely “autonomous code,” making decentralization insufficient to avoid compliance.
Protocols that support stablecoins, RWAs, DEX functionality, bridges, or liquidity routing may be subject to licensing requirements. Enforcement has already begun, with penalties ranging from heavy fines — up to 1 billion dirhams ($272.3 million) — to criminal sanctions for operating without authorization.
Self-custody remains legal, but service providers must reassess operations
Despite online speculation about a potential ban on crypto wallets, UAE legal experts clarify that the law does not restrict individuals from self-custody. Kokila Alagh of Karm Legal Consultants said the legislation targets companies offering stored-value services, not private users holding assets in personal wallets.
However, wallet providers that facilitate payments, transfers, or other regulated financial services for UAE residents may need a license. Both Alagh and Heaver expect additional guidance from the central bank as implementation proceeds, but emphasize that the immediate impact is on firms — not individuals — as the UAE tightens oversight while keeping itself positioned as a global Web3 hub.
Recently we wrote that the Virtual Asset Service Provider (VASP) license was granted by the UAE Securities and Commodities Authority (SCA), making Bybit the first crypto exchange to obtain such approval.
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