The United Arab Emirates has taken one of its most sweeping regulatory steps to date with the enactment of Federal Decree No. 6 of 2025, a banking law that places DeFi, Web3 platforms, stablecoin protocols, decentralized exchanges, and cross-chain bridges directly under the supervision of the Central Bank of the UAE (CBUAE).
The framework, in effect since September 16, 2025, is designed to merge the country’s digital-asset ecosystem with its traditional financial infrastructure and solidify the UAE’s status as a global crypto hub.
A Major Expansion of Regulatory Authority
The decree significantly broadens the central bank’s oversight. Any platform, centralized or decentralized, that offers payments, exchange functionality, lending, custody, or investment services must now fall under CBUAE regulation. This marks the end of the “code-only” defense some decentralized protocols previously used to avoid licensing obligations.
Crucially, the law applies not only to firms physically based in the UAE but to any project worldwide that offers accessible services to UAE residents. It also overrides existing frameworks in high-profile free zones, including VARA in Dubai and ADGM in Abu Dhabi, aligning all jurisdictions under one federal regime.
Licensing Required by September 2026
Projects engaging in regulated activities must obtain appropriate licenses by September 2026. Failure to do so carries serious consequences: the law includes financial and criminal penalties, with fines reaching as high as 1 billion dirhams, roughly $272 million. The severity of these penalties signals a clear message, operating without authorization is no longer tolerated, regardless of whether a protocol claims to be decentralized.
Clarification on Self-Custody
Following widespread public concern, legal analysts and media outlets clarified that the decree does not ban individuals from holding or using self-custody wallets. Personal wallet use remains fully legal.
However, companies offering wallet services that enable regulated activities, such as processing payments, must obtain licenses, putting wallet providers under the same compliance expectations as other digital-asset service operators.
A Strategic Move Tied to Global Compliance Efforts
This regulatory overhaul is also part of the UAE’s broader plan to demonstrate adherence to international standards for combating money laundering and counter-terrorist financing. The country has been working to exit the FATF Grey List, and establishing stronger oversight of digital-asset activity is viewed as a critical step toward that goal.
By bringing DeFi and Web3 under the same umbrella as traditional banking activity, the UAE is signaling that digital-asset innovation is welcome, but only under a clearly defined, tightly supervised framework.