UAE Law and Practice Contributed by: Irina Heaver and Zainab Kamran, NeosLegal
Financial Free Zones In the DIFC, while there is no standalone insolvency regime specific to digital asset firms, the Digital Assets Law No 2 of 2024 introduced targeted amendments to the DIFC Insolvency Law addressing the treatment of digital assets in insolvency scenarios, including provi- sions on the treatment of debts denominated in digital assets in liquidation, asset control in cases of impair- ment, and the exercise of rights over digital assets upon death, incapacity or insolvency. The general DIFC insolvency framework otherwise applies. In ADGM, no specific insolvency provisions apply to digital asset firms, and the general ADGM insolven- cy framework governs, providing for administration, receivership and winding-up processes in the usual way. 1.2.6 Industry and Trade Bodies See 1.1.5 Industry and Trade Bodies . 2. Regulation 2.1 Regulators and International Alignment The UAE employs a multi-jurisdictional approach to the regulation of virtual asset activities, with oversight distributed across federal regulators, an emirate-level regulator in Dubai, and the financial free zones, each operating under its own legal and regulatory frame- work. The applicable regime depends on the jurisdic- tion of incorporation and operation. Onshore UAE Central Bank of the UAE (CBUAE) The CBUAE regulates payment tokens and licensed financial institutions at the federal level. Under the Payment Token Services Regulation 2024 (Circular No 2/2024) (PTSR), no person may issue, convert, custody, transfer or promote payment tokens, namely fiat-referenced stablecoins, in or from the UAE with- out the relevant CBUAE licence or registration. The PTSR distinguishes between Dirham Payment Tokens, namely AED-denominated stablecoins, which require a CBUAE licence, and Foreign Payment Tokens, namely non-AED stablecoins, for which the foreign issuer must obtain CBUAE registration as a Regis- tered Foreign Payment Token Issuer. Approved Dir-
ham Payment Token issuers to date include AE Coin, Zand AED, RAKBANK’s AED stablecoin and the IHC- led DDSC. Available authorisations under the PTSR are: (i) Licensed Payment Token Issuer (Dirham); (ii) Regis- tered Foreign Payment Token Issuer; (iii) Licensed or Registered Payment Token Conversion Provider; and (iv) Licensed or Registered Payment Token Custodian and Transferor. VASPs already licensed by the CMA or VARA for sta- blecoin custody, transfer or conversion must apply for a Non-Objection Registration to continue those services. Capital Market Authority (CMA) The CMA, formerly the Securities and Commodities Authority (SCA), restructured under Federal Decree- Laws Nos 32 and 33 of 2025 with effect from 1 Janu- ary 2026, regulates capital markets at the federal level, with authority extending to virtual assets used for investment purposes, excluding the financial free zones, and with VASP licensing in the Emirate of Dubai delegated to VARA pursuant to Cabinet Resolution No 112 of 2022. Its remit covers the licensing and over- sight of crypto trading platforms and other VASPs, including dealers, brokers, custodians, advisers and portfolio managers, as well as the development of the federal regulatory framework. On 13 February 2026, the CMA issued Decision No 4/R.M/2026, a standalone VASP rulebook that super- sedes Decision No 26/R.M/2023 and repeals the virtu- al asset provisions of the prior SCA Financial Activities Rulebook. The framework is structured across three modules, namely the General Framework Module, the Business Regulation Module and the Alternative Trad- ing System Module, and licenses eight distinct VASP activities: (i) dealing in virtual assets as principal; (ii) dealing in virtual assets as agent; (iii) providing cus- tody; (iv) arranging custody; (v) operating a multi-party trading platform; (vi) providing investment advice; (vii) portfolio management; and (viii) arranging investment transactions.
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