Dubai’s tax-free economic zone DIFC enacts new Digital Assets Law

The Dubai International Financial Centre (DIFC), a tax-free special economic zone in the United Arab Emirates city, announced the enactment of its new Digital Assets Law earlier this week.

Alongside a new Law of Security and related amendments to existing legislation, the enactments aim to help the DIFC keep pace with technological development in international trade and financial markets and to provide legal clarity for investors and users of digital assets.

The DIFC’s Digital Assets Law follows a review of the regulatory approach taken by various jurisdictions around the world and a period of public consultation carried out last year, coming into effect on March 8.

Established to promote financial services and attract international investment, the DIFC operates with its own legal system and courts based on English common law, separate from the wider UAE.

“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,” DIFC Chief Legal Officer Jacques Visser said in a statement.

“The DIFC’s move to modernize its property and securities laws for blockchain capabilities could support growth in digital asset and tokenization initiatives by attracting market participants to the free zone,” ratings agency Moody’s told The Block.