The Dubai International Financial Centre (DIFC) has enacted what it claims is the world’s first digital assets law.
The legislation is designed to ensure the DIFC keeps pace with changes to financial markets as a result of technology advancements. It is also designed to give more legal certainty for investors in digital assets.
The move comes amid an acceleration in legislative developments around the world. The EU is in the process of finalising its Markets in Crypto Assets regulation which is due to take effect in December.
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Meanwhile the US Securities and Exchanges Commission approved the first spot bitcoin ETF in January which has led to a spike in bitcoin price.
According to the DIFC, international legal developments have provided some clarity but there is no comprehensive legal framework for digital assets as yet and questions on the legal characteristics of a digital asset and how it interacts with other instruments remain open to debate.
Consequently, the DIFC has decided to enact its own law, following consultation with the market.
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In addition, the DIFC is amending some of its existing laws while also repealing others which are no longer deemed to be relevant.
Jacques Visser, Chief Legal Officer at DIFC Authority, said: “We consider the Digital Assets Law to be groundbreaking as the first legislative enactment to comprehensively set out the legal characteristics of digital assets as a matter of property law, and to provide for how digital assets may be controlled, transferred and dealt with by interested parties.
“At the same time, we are also enacting a new law of security, replacing the 2005 law. The revised regime is modelled on the UNCITRAL Model of Secured Transactions and significantly enhances DIFC’s securities regime to keep pace with international developments in this field and to ensure DIFC remains at the forefront of best practice.”