The DIFC passes first comprehensive legislation on digital assets as property

With this historic move, DIFC joins several other jurisdictions and nations in regulating crypto as property

Published: Mar 18, 2024 03:45:55 PM IST

The main building of Dubai International Financial center, the fastest growing international financial center in Middle East. Image: Shutterstock

The Dubai International Financial Centre (DIFC) has passed a new Digital Assets Law and Security Law, as well as amended some existing legislation, in an effort to remove any lingering uncertainty investors and users may have in embracing the revolutionary digital assets technology.

As a statement from the concerned authorities suggest, the new legislation has been brought to “keep pace with the rapid developments in international trade and financial markets […] and to provide legal certainty for investors in, and users of, Digital Assets….”

This is a historic move, for this Digital Assets Law happens to be the first comprehensive set of guidelines on the legal characteristics of digital assets as property. Jacques Visser, who leads the legal affairs division of the Dubai International Financial Centre Authority, had this to say:

“We consider this legislation to be groundbreaking as the first legislative enactment to comprehensively set out the legal characteristics of digital assets as a matter of property law.”

The new Digital Assets Law is a fairly short one: containing seven pages of text and appendices. The Security Law 2024 is not as short, however. It has replaced a 2005 law and a subsequent 2019 amendment, and accounted for the Financial Collateral Regulations into the text.

Notably, the Dubai International Financial Centre is a special economic zone with more than 5,000 residents, and a legal system that takes its cue from English law. The new legislation to have passed in particular takes inspiration from the United Nations Commission on International Trade Law’s Model Law on Secured Transactions, while also ensuring alignment with the best practices followed globally.

With the new rules, the DIFC joins Hong Kong, Singapore, and more nations and jurisdictions in regulating crypto and other digital assets as property. The approaches differ in their considerations, but the overall picture remains the same: the world leaders are noting the potential of crypto, as well as interest from both institutional and individual investors, and passing out regulations for the safety of their citizens and the betterment of their respective economies.

All eyes on the bigger economies now. It remains to be seen what countries like the US have in store for crypto enthusiasts.

Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist.

Twitter: @bhardwajshash