• The new decree-law grants the UAE Central Bank full operational independence and clearer oversight over financial institutions.
• Updated governance rules ensure transparency, with a Board of Directors focused on financial expertise and conflict-free decision-making.
• The law strengthens market supervision and customer protection, including stricter reporting requirements and enhanced intervention powers.

The United Arab Emirates (UAE) has introduced a major regulatory overhaul that redefines the structure and authority of the Central Bank. The new decree-law centralizes monetary authority and expands the Central Bank’s supervisory powers over the national financial system. The  federal decree brings decentralized finance (DeFi) platforms, decentralized exchanges (DEXs), Web3 projects, blockchain bridges, and stablecoin issuers under the direct regulation of the UAE Central Bank. 

This move aims to strengthen oversight and ensure the security of the rapidly growing cryptocurrency and blockchain sectors. By placing these entities under central bank supervision, the UAE seeks to create a more stable and compliant environment for digital assets. The decree marks a significant step in regulating the region’s crypto space, aligning it with global financial standards.

Central Bank’s Expanded Role and Governance Updates

Under the new framework, the Central Bank of the UAE becomes the primary institution for overseeing monetary policy and ensuring financial stability. The decree-law grants the Central Bank full operational and financial independence, with direct reporting to the UAE President. This independence allows the bank greater flexibility to execute its monetary policies, separate from public finance procedures.

The new law also clarifies the institutions that fall under the Central Bank’s supervision. Banks, insurers, finance companies, and payment firms are all required to comply with the Central Bank’s regulations. However, financial free zones are excluded from this supervision, as they are governed by separate legislation. Moreover, the law mandates that government-related entities coordinate with the Central Bank when their activities affect the broader financial system.

Significant changes are also made to the governance structure. The Central Bank’s Board of Directors now consists of seven members, each serving renewable four-year terms. These members must hold UAE nationality and possess financial or economic experience. The law also ensures that Board members avoid conflicts of interest, ensuring greater transparency and decision-making integrity.

Stronger Market Supervision and Customer Protection

The updated decree-law enhances market oversight, especially concerning risk management, settlement systems, and corporate governance. The Central Bank now has the authority to impose stricter requirements on institutions related to liquidity, exposure, and internal controls. Furthermore, financial institutions must submit accurate, timely reports and maintain guarantees for their activities. There are also new restrictions on real estate ownership, share acquisitions, and lending tied to a firm’s own stock. These measures are designed to reduce concentration risk and improve credit discipline within the financial market.

Customer protection is another key focus of the new framework. Banks and insurers must resolve customer complaints within defined timelines. If unresolved, cases are escalated to an independent unit within the Central Bank. Institutions are also required to enhance data protection, strengthen authentication procedures, and provide clear disclosures regarding fees. The new decree-law enhances the powers of the Central Bank for intervention. The authority can now dismiss the management teams, impose capital increases, or force mergers in critical situations of the finance sector.

Besides, the Central Bank also has the power to wind up troubled institutions when that’s needed. These actions make a fit financial system, as they will help manage the distressed institutions in a systematic way. So, with these major shifts, the UAE’s Central Bank has gained more powerful tools to control and watch over the financial sector, thereby securing its stability and accountability in a very wide field of industries.