DIFC Makes History with World's First Digital Assets Law
This month, the Dubai International Financial Centre - DIFC - has just enacted the world's first Digital Assets Law, along with a new Law of Security and amendments to existing legislation. This groundbreaking move aims to keep DIFC laws up-to-date with rapid developments in international trade and financial markets, particularly in the digital assets sector.
What does this mean? Well, the new law recognizes digital assets as a trillion-dollar asset class with immense potential for innovation and market opportunities. While many jurisdictions have focused on regulating this asset class from a financial services perspective, there has been ongoing debate about the legal nature and consequences of digital assets.
Following extensive review and public consultation in 2023, DIFC has enacted its own Digital Assets Law to provide legal certainty for investors and users of digital assets. This law, along with amendments to existing laws, addresses specific issues related to digital assets, such as the use of electronic transferable records.
The update also includes a new Law of Security to enhance DIFC's securities regime, aligning it with international best practices. This move will provide clarity for transactions involving digital asset collateral and digitized international trade.
These legislative changes, effective as of March 8, 2024, demonstrate DIFC's commitment to maintaining a transparent and robust legal framework. The new laws are expected to play a crucial role in shaping the future of digital assets in the global financial landscape.
“DIFC is excited to announce the enactment of its Digital Assets Law. 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, and to provide for how digital assets may be controlled, transferred and dealt with by interested parties,” stated Jacques Visser, Chief Legal Officer at DIFC Authority. “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.”
With these pioneering laws, DIFC is paving the way for a future where digital assets revolutionize the global financial landscape, offering a plethora of possibilities for innovation and growth.
