- Dubai International Financial Centre (DIFC) is introducing a Digital Assets Law and a new Security Law to adapt to the growing digital assets market.
- The Digital Assets Law will cover ownership, control, transfer, and management of digital assets, while the Security Law will be tailored to the DIFC context.
- The Digital Assets Law will cover cryptocurrencies, NFTs, stablecoins, and security tokens, recognizing their potential for innovation and market opportunities.
The Dubai International Financial Centre (DIFC), a significant financial hub spanning the Middle East, Africa, and South Asia (MEASA), has unveiled an ambitious initiative. This initiative aims to introduce a novel Digital Assets Law, a fresh Security Law, and associated modifications to existing legislation within its jurisdiction.
The primary goal behind these efforts is to adapt to the evolving demands of the burgeoning digital assets landscape within the DIFC and ensure that its legal framework remains aligned with the rapid technological advancements and global market trends.
The proposed legislative changes and amendments are designed to offer clear and unequivocal legal guidelines for both digital asset investors and users.
Jacques Visser, the Chief Legal Officer at DIFC, has shed light on the Digital Assets Law, which delineates the legal aspects of digital assets, encompassing aspects such as ownership, control, transfer, and management.
The newly proposed Security Law draws inspiration from the UNCITRAL Model on Secured Transactions but has been tailored to address specific nuances pertinent to the DIFC context.
It’s noteworthy that the Digital Assets Law proposal encompasses a broad spectrum of digital assets, including cryptocurrencies, NFTs, stablecoins, and security tokens. This recognition underscores their status as a significant trillion-dollar asset class, brimming with potential for innovation and market opportunities.
While many jurisdictions have primarily focused on regulating this asset class from a financial services standpoint, DIFC’s proposal seeks to establish a comprehensive legal framework that delves into fundamental questions surrounding the nature and legal attributes of digital assets. It also extends its reach to delineate how users and investors can engage within this asset class.
Concurrently, the Law of Security is undergoing a transformation to keep stride with international developments in secured transactions. This includes facilitating credit backed by digital asset collateral and the digitalization of international trade.
DIFC’s plans include the repeal of the existing Law of Security, substantial amendments, and an enhancement of its securities regime, aligning it with global best practices. Furthermore, the proposed new Law of Security will incorporate provisions related to financial collateral.
These proposals are now open for public consultation, spanning an extended period of 40 days, concluding on November 5, 2023. This window offers stakeholders and the public an opportunity to provide input and shape the future regulatory landscape within the DIFC.