The Dubai International Financial Centre (DIFC), home to over 5,000 residents, has unveiled its latest legislative updates, focusing on digital assets and security regulations. This special economic zone, governed by its legal system rooted in English law, aims to adapt to the fast-paced landscape of international trade and finance.
The recently announced Digital Assets Law aims to provide legal clarity and certainty for investors and users of digital assets within the DIFC. Jacques Visser, Chief Legal Officer of the DIFC Authority, hailed the legislation as groundbreaking for comprehensively defining the legal attributes of digital assets under property law.
Key Highlights of the Digital Assets Law
The Digital Assets Law, spanning seven pages along with appendices, underscores the DIFC’s commitment to regulating digital assets effectively. Additionally, amendments to existing laws, although not yet available online, signify the center’s proactive approach to aligning regulations with evolving technologies.
Replacing its 2005 precursor and its 2019 amendment, the much-lengthier Security Law 2024 has integrated the Financial Collateral Regulations. This new legislation, modeled after the UN Commission on International Trade Law’s Model Law on Secured Transactions, emphasizes international best practices, reinforcing the DIFC’s status as a global financial hub.
DIFC’s Ongoing Regulatory Evolution
The DIFC’s recent cryptocurrency regulations update in 2022 laid the groundwork for its latest legislative endeavors. Subsidizing licenses for artificial intelligence and Web3 companies since 2023 has further solidified the center’s position as a leading advocate for emerging technologies.
In 2023, the organisation reported a remarkable net profit of $203 million, marking a substantial 45% increase from the previous year. Moreover, new registrations surged by 34%, showcasing heightened interest from hedge funds, European, and American businesses.
While the body’s Digital Assets Law is celebrated as a pioneering move, it’s worth noting that other jurisdictions, including China, Singapore, and Hong Kong, have previously addressed the classification of digital assets as property. These global developments underscore the growing recognition of cryptocurrencies within legal frameworks worldwide.
