A major legislative development in the United Arab Emirates is poised to reshape how decentralized finance and broader Web3 activities operate within the region. The country’s newly enacted central banking framework, Federal Decree Law No. 6 of 2025, has been described by regional legal professionals as one of the most influential regulatory changes affecting the crypto ecosystem in the UAE. Industry attorney Irina Heaver, who leads NeosLegal, indicated that the law marks a turning point for firms building or operating blockchain-based services in the country.
Heaver noted that the measures pull a wide range of decentralized protocols, middleware systems, and infrastructure providers into regulatory view if their platforms support activities such as payments, asset exchange, lending, custody, or investment-related services. She suggested that companies should view this as a crucial compliance milestone and prepare their systems ahead of a transition deadline scheduled for September 2026.
The decree, already published in the Official Gazette and in full force since mid-September 2025, establishes a comprehensive framework governing financial institutions, the insurance sector, and digital asset activities. Two core provisions—Article 61 and Article 62—outline an extensive list of financial operations requiring licensure from the Central Bank of the UAE. These activities range from crypto-based payments to services involving digital stored value.
Heaver emphasized that Article 62 expands regulatory scrutiny to any entity that conducts or facilitates financial activities using any medium or technology. In her view, this effectively eliminates previous arguments suggesting that decentralized protocols were exempt from oversight because they were merely lines of code or operated without centralized control. She added that platforms enabling stablecoin support, real-world asset tokenization, decentralized exchange features, bridging mechanisms, or liquidity routing could fall within licensing obligations. Enforcement is reportedly active, with penalties for operating without authorization reaching as high as one billion dirhams, along with potential criminal consequences.
Clarifying Implications for Wallet Providers and Self-Custody
Another area of industry concern involves the law’s application to cryptocurrency wallets. Because the statute relates directly to stored-value services, analysts expect that wallet providers will face stricter compliance requirements. Kokila Alagh, founder of Karm Legal Consultants, explained that confusion has emerged regarding whether the legislation affects self-custody or non-custodial wallets, which allow users to retain independent control over their assets.
Some industry commentators suggested that the new framework amounted to an indirect ban on crypto apps and self-custodial tools. However, Alagh and Heaver both stated that the law does not restrict individuals from maintaining personal wallets or managing their own assets. According to Alagh, the new rules simply broaden the regulatory scope for companies operating wallet services. She noted that if a wallet provider enables transfers, payments, or other regulated financial functions for users inside the UAE, then the business may need to secure a license.
Alagh reported that her firm has received a wave of inquiries from businesses seeking clarity on how the rules apply to their operations. She added that further guidance from the Central Bank is expected during the implementation phase, though no specific date has been set for an official interpretation. Until then, individuals remain unaffected, while firms are encouraged to evaluate whether their services fall within the regulated categories.
In parallel, public commentary from industry figures has raised criticism surrounding how local legal professionals have interpreted the legislation. One noted critic suggested that firms in the UAE legal sector have financial incentives to frame the law in a particular light. Alagh responded by stating that Karm Legal continues to coordinate with the Central Bank on obtaining clearer guidance and remains focused on ensuring firms understand their compliance responsibilities as the regulatory landscape shifts.
