• UAE’s new law brings DeFi under central bank regulation.
• Licensing is now required for payments, exchanges, and lending activities.
• Self-custody wallets remain legal, but companies face compliance rules.
• Penalties include fines up to $272 million and criminal liability.

The United Arab Emirates has introduced the first-ever financial legislation related to decentralized finance (DeFi) and the wider aspect of Web 3. Federal Decree Law No. 6 of 2025 was announced in the Official Gazette on the 16th of September 2025. Such activities related to digital assets come within the purview of the central bank.

The legislation signals a major shift for the crypto industry in the region, creating a clear legal framework for protocols, platforms, and infrastructure providers. Under the law, companies operating in the UAE offering payments, exchange, lending, custody, or investment services must comply with licensing requirements.

This marks the end of the long debate on the ability of decentralized networks to operate without regulation simply because they are “just code.” However, the industry must comply with the new regulations by September 2026.

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Compliance Required for DeFi Projects

Under the law, the activities subject to the license given by the Central Bank of the UAE (CBUAE) are outlined in articles 61 and 62. These cover the issue of digital payments and the provision of stored value. Any business involved in the aforementioned financial service, irrespective of the technology used, falls within the remit of the law.

DeFi protocols supporting stablecoins, real-world assets, decentralized exchanges,  liquidity routing solutions, and bridging solutions may require licenses. Authorities have already enforced the new regulations. Failure to comply may incur fines of up to 1 billion dirhams, which is equivalent to $272.3 million. According to the new platform regulation act outlined in the report, self-custody wallet solutions will not be banned.

Self-Custody and DeFi Company Obligations

However, some analysts believed that the act also serves as an effective ban on self-custodial wallets. Experts dispute such views by saying that individuals are free to use their personal wallet solutions in the same way that they always have. Only the aspect of payments, transferring funds, or offering any sort of regulated service to customers in the UAE now requires the relevant licenses.

Law firms are advising clients on compliance issues and waiting for further guidance from the Central Bank of the UAE (CBUAE). That the law has led to an influx of industry inquiries suggests both uncertainty and the desire for regulation alignment.

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