Dubai International Financial Centre Introduces Groundbreaking Legislation for Digital Assets

The Dubai International Financial Centre (DIFC), a prominent free zone spanning the Middle East, Africa, and South Asia (MEASA) region, has implemented a pioneering Digital Assets Law, reshaping its legal framework to accommodate these emerging financial instruments. This legislation brings about significant changes to contracts, insolvency, damages, obligations, securities, and personal property laws, reflecting the evolving landscape of digital assets.

Dubai International Financial Centre Sets Precedent with Landmark Digital Assets Law
In a move reflecting the growing prominence of digital assets, the Dubai International Financial Centre (DIFC), a leading financial hub in the MEASA region, has introduced what it heralds as the world's inaugural digital assets law. This legislative milestone acknowledges and regulates the presence of digital assets within its jurisdiction.

Beyond defining digital assets, the DIFC's Digital Assets Law revises various statutes, including contract law, obligations law, security law, damages and remedies law, trust law, and foundations law, to address pertinent considerations. Notably, certain digital assets now hold status akin to currency, while the law provides a refined definition for this asset class.

Jacques Visser, Chief Legal Officer at the DIFC Authority, underscores the significance of this legislation and its global precedent. Visser describes the DIFC's enactment as "pioneering," emphasizing its role in establishing "the legal characteristics of digital assets within property law." Additionally, the legislation outlines protocols for the control, transfer, and management of digital assets by relevant parties.

While Dubai had previously ratified its digital assets law in 2022, assigning oversight to the Virtual Assets Regulatory Authority (VARA), this legislation did not extend to the DIFC due to its distinct governance structure, overseen by the DIFC Authority and the Dubai Financial Services Authority (DFSA).

In a further initiative to foster innovation, the DIFC has announced plans to subsidize up to 90% of licensing fees for Web3 and artificial intelligence (AI) enterprises seeking to establish operations within the zone.