Digital Assets Law enacted by DIFC—(Dubai International Financial Centre) the world’s first comprehensive legislation defining the legal characteristics of digital assets. Explore how these assets can be controlled, transferred, and handled within the new regime. Legal clarity meets technological innovation
The Dubai International Financial Centre (DIFC) is a significant free zone in the Middle East, Africa, and South Asia (MEASA) region. Recently, it has introduced a new Digital Assets Law, which has led to a complete overhaul of its legislative system to accommodate these assets. The new law alters the previous regulations related to contracts, insolvency, damages, obligations, securities, and personal property laws to fit in the existence of digital assets.
Dubai International Financial Centre has passed a law that recognizes digital assets. This is being touted as the “world’s first” law to do so
Digital assets are becoming more widely acknowledged and lawmakers are now including them in innovative legal frameworks. The Dubai International Financial Centre (DIFC), which is one of the largest financial hubs in the Middle East, Africa and South Asia (MEASA) region, has recently enacted the “world’s first” digital assets law, which takes into account the existence of this asset class.
In addition to defining digital assets, the Digital Assets Law of DIFC amends several other laws, such as the law of contracts, law of obligations, law of security, law of damages and remedies, trust law, and foundations law, to address various determinations. For instance, some laws now recognize certain digital assets as money while others modify the definition of this asset class according to the new law.
Jacques Visser, who is the Chief Legal Officer at DIFC Authority, explained the potential of the new law and its pioneering nature in the world. Visser stated that the DIFC considers this document “groundbreaking” because it is the first legislative enactment to comprehensively define the legal characteristics of digital assets as a matter of property law. Additionally, the document outlines how digital assets may be controlled, transferred, and dealt with by interested parties.
In 2022, Dubai passed a digital assets law that placed the Virtual Assets Regulatory Authority (VARA) in charge of overseeing the sector. However, this law does not extend to the Dubai International Financial Centre (DIFC), which has its own governing body, the DIFC Authority, and its own financial services regulator, the Dubai Financial Services Authority (DFSA).
In August, DIFC announced that it would sponsor 90% of the license expenses for Web3 and artificial intelligence companies with public projects in the financial zone.
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Conclusion
“Dubai International Financial Centre (DIFC) has taken a pioneering step by enacting the world’s first Digital Assets Law (DIFC Law No. 2 of 2024). This groundbreaking legislation defines digital assets as a form of property and outlines how they can be controlled, transferred, and managed by various parties. Simultaneously, DIFC introduces a new Law of Security, replacing the 2005 law, aligning with international developments and ensuring legal clarity for investors and users of digital assets. As the trillion-dollar digital asset class continues to evolve, DIFC remains at the forefront of best practices, providing a robust legal framework for this dynamic domain.” 🌐💼
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