A recent financial regulation in the United Arab Emirates aims to integrate decentralized finance (DeFi) and the Web3 sector into its regulatory framework, indicating a significant shift for the industry.

The new central bank law, Federal Decree Law No. 6 of 2025, is described as “one of the most critical regulatory changes” in the region’s crypto landscape, according to local crypto attorney Irina Heaver, who is also the founder of NeosLegal.

“It encompasses protocols, DeFi platforms, middleware, and even infrastructure providers involved in payments, exchanges, lending, custody, or investment services,” Heaver emphasized.

Industry participants operating in the UAE need to recognize this regulatory evolution and make necessary adjustments to their systems before the transition deadline set for September 2026.

No More ‘Just Code’ Defense

Legally recognized since September 16, 2025, the UAE’s Federal Decree Law No. 6 brings financial institutions and activities related to digital assets under the purview of the central bank. Its stipulations, specifically Articles 61 and 62, outline activities requiring a license from the Central Bank of the UAE (CBUAE), covering areas such as crypto payments and digital stored values.

Heaver noted that the law asserts that anyone engaged in licensed financial activities “through any means, medium, or technology” falls under CBUAE’s regulatory authority.

This stipulation effectively eliminates the argument that DeFi projects could evade regulation by merely claiming to be “just code,” further stressing that decentralization does not exempt protocols from compliance standards.

Projects associated with stablecoins, real-world assets (RWA), and decentralized exchanges (DEX) will now likely require formal licensing, with non-compliance facing hefty fines, potentially reaching up to 1 billion dirhams (approximately $272 million), as well as criminal penalties.

Self-Custody Not Criminalized

As the new law pertains to “stored value services,” it could also impact cryptocurrency wallet providers, as noted by Kokila Alagh from Karm Legal Consultants.

Alagh stated that there has been increasing uncertainty about whether the law applies to self-custodial wallets, which allow users to securely manage their assets independently.

“The regulation does not prohibit self-custody or prevent individuals from utilizing their personal wallets; it simply broadens the regulatory framework for companies,” Alagh clarified.

As firms navigate compliance, they must understand that if a wallet provider facilitates payments or other regulated financial services for users within the UAE, they must comply with licensing standards.

“More guidance from the Central Bank is anticipated as the implementation continues, but for the moment, individual users should remain unaffected while firms evaluate their regulatory obligations,” she added.

This law indeed reshapes the landscape for decentralized finance and Web3 in the UAE, signaling both challenges and opportunities for those involved in the industry.