The UAE’s new financial law is set to bring decentralized finance (DeFi) and wider Web3 into its regulatory scope, marking a significant change for the industry.
The UAE’s new central banking law, Federal Decree Law No. 6 of 2025, introduces “one of the most significant regulatory reforms” for the region’s crypto industry, local crypto lawyer and NeosLegal founder Irina Heber told Cointelegraph.
“This includes protocols, DeFi platforms, middleware, and even infrastructure providers that enable activities such as payments, exchanges, lending, custody, and investment services,” Heber said.
The lawyer said industry projects building or operating in the UAE should treat this as a crucial regulatory milestone and adjust their systems by the September 2026 transition deadline.
“We’re just code” is no longer a defense
The UAE’s Federal Decree Law No. 6, published in the Official Gazette and legally enforceable from September 16, 2025, is a central banking law that regulates financial institutions, insurance operations, and digital asset-related activities.
Its key provisions, Articles 61 and 62, list activities that require a license from the Central Bank of the UAE (CBUAE), including cryptocurrency payments and digital stored value.
“Article 62 provides that any person who carries on, proposes, issues or facilitates authorized financial activities “through any means, medium or technology” falls within the CBUAE’s regulatory boundary,” Heber said.
Excerpt from UAE Federal Decree No. 6. Source: CBUAE
In practice, this means that DeFi projects can no longer evade regulation by claiming to be “just code,” the lawyer said, adding that the “decentralization” argument does not exempt them from adhering to the protocol.
Protocols that support stablecoins, real-world assets (RWA), decentralized exchange (DEX) functionality, bridges, or liquidity routing “may require a license,” Heber said. He added that a crackdown is already underway, with penalties for unauthorized activities including fines of up to 1 billion dirhams ($272.3 million) and possible criminal penalties.
The law does not prohibit self-custody
The UAE’s new central banking law is likely to impact crypto wallet providers as it directly relates to the provision of “stored value services,” Kokila Alag, founder and managing partner of Calum Legal Consultants, told Cointelegraph.
Arag said there was “considerable confusion” over whether the law affected self-custodial wallets or non-custodial wallets, which are designed to allow users to store assets independently of third parties.
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While some industry observers, such as Trading Strategies’ Mikko Otamaa, have suggested the law would lead to a “de facto ban” on cryptocurrencies and self-custodial wallet apps in the UAE, Arar and Heber said this was not the case.
Excerpt from UAE Federal Decree No. 6. Source: CBUAE
“This law does not prohibit self-custody, nor does it restrict individuals from using their own wallets,” Arag said, adding that the law “simply expands” the scope of regulation for companies.
“Licensing requirements may apply if a wallet provider enables payments, remittances or other regulated financial services for UAE users,” she noted.
Mr Aller said Calum Legal has received a significant number of inquiries regarding this issue, adding:
“We expect further clarity from central banks as the law comes into force, but while individuals are not affected at this time, businesses will need to assess whether their activities fall within the scope of the regulations.”
Ironically, Autamar’s post specifically criticized UAE lawyers, claiming their business had “no interest in the UAE”.
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“For independent law firms, anything that undermines the UAE’s attractiveness to crypto is a loss of revenue, and these lawyers are willing to obfuscate facts and legal texts just to secure annual bonuses,” Autamer argued.
Karm Legal’s Alagh told Cointelegraph that the company is actively following up with the CBUAE on this issue, but there is no set date for the authorities to provide an explanation.
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