UNITED ARAB EMIRATES Trends and Developments Contributed by: Arnold Krutilins and Gabrielle Margerison (nee Lowe), White & Case LLP
In addition to broader enhancements, including expanded scope and strengthened offences and pen - alties, the New AML Law expressly addresses illicit activities involving digital systems and virtual assets. This is particularly relevant to fintech firms, includ - ing VASPs, digital wallet providers and payment plat - forms, which increasingly facilitate financial services through digital infrastructure. In particular, the New AML Law introduces an offence where a person enables a third party to benefit from the use of an account held with a financial institution or VASP where that person has actual knowledge, or there is sufficient evidence to indicate, that the account will be used for illicit purposes. This offence appears intended to address money laundering and illicit finance risks arising from digital financial services and virtual asset-related business models. A person who commits this offence may be subject to criminal penalties, including fines and imprisonment. These changes reflect increased regulatory focus on the risks associated with digital financial services and virtual asset-related activities and reinforce the impor - tance of robust AML controls, customer due diligence and transaction monitoring for fintech firms operating in the UAE. The New AML Law came into effect on 14 October 2025, following its publication in the UAE’s Official Gazette on 30 September 2025. The New CBUAE Law Alongside AML reforms, the UAE has introduced leg - islative changes directly affecting fintech and digital financial services. In September 2025, the UAE issued Federal Decree- Law No 6 of 2025 Regarding the Central Bank, Regu - lation of Financial Institutions and Activities and Insur - ance Business (the “New CBUAE Law”). This repealed and replaced Federal Decree-Law No 14 of 2018 (as amended) (the “2018 CBUAE Law”), which previously governed the CBUAE’s regulatory framework. The New CBUAE Law retains the general structure of the 2018 CBUAE Law, including the requirement that Licensed Financial Activities may only be carried on in
or from Onshore UAE with the approval of the CBUAE; however, the New CBUAE Law sets out updates to the CBUAE’s statutory framework to address devel - opments in the regulation of open finance services, virtual asset-related activities and digital currency. New licensed financial activities One of the key changes under the New CBUAE law is the introduction of two new “licensed financial activi - ties”. This includes: (i) providing open finance servic - es; and (ii) providing payment services using virtual assets. These licensed financial activities reflect the growing role of fintech business models, including open banking platforms, digital payment providers and virtual asset-based payment solutions and we understand that these have been included to reflect the activities regulated under the CBUAE’s Open Finance Regulation and Payment Token Services Regulations that were issued in 2024. By expressly recognising these activities under Article 61, the New CBUAE Law brings fintech firms operat - ing open finance and virtual asset-enabled payment models within the CBUAE’s regulatory perimeter. As a result, entities carrying on these activities in or from Onshore UAE must obtain a licence from the CBUAE and are subject to its supervisory and enforcement powers. Article 62 Another key development under the New CBUAE Law is the introduction of Article 62, which clarifies that “any Person carrying on, offering, issuing, or facilitat - ing, whether directly or indirectly, any Licensed Finan - cial Activity – regardless of the medium, technology, or form employed – shall be subject to the licensing, regulatory, and oversight jurisdiction of the Central Bank”. This provision is particularly relevant for fintech firms, as it confirms that licensing requirements apply equally to digital-first financial services, including those deliv - ered through distributed ledger technology, mobile applications or digital platforms. In its publicly available FAQs, the CBUAE makes clear that Article 62 is not intended to introduce new categories of Licensed Financial Activities. Instead,
932 CHAMBERS.COM
Powered by FlippingBook