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DIFC rolls out the world’s first Digital Assets Law: The Dubai International Financial Centre (DIFC) has enacted its new Digital Assets Law (pdf), accompanied by amendments to existing legislation to address the implications of the new digital assets regime, a DIFC press release reads. The law came into force on 8 March.
The new law aims to provide clarity and a holistic legal framework for the usage of digital assets, according to the statement. Existing laws, such as the Contracts Law, Obligations Law, Security Law, Damages and Remedies Law, Trust Law, and Foundations Law, have been updated to address issues concerning digital assets, to keep up with the financial landscape as it evolves.
Why this matters: “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 recognizing the growing potential of digital assets, the DIFC boldly positions itself as a pioneer by enacting the world’s inaugural digital assets law,” Baker McKenzie Partner Mazen Boustany told Enterprise UAE.
Digitizing paper trade documents: The DIFC also released updates to allow the usage of electronic transferable records, mirroring traditional trade paper documents such as bills of lading, bills of exchange, promissory notes, and warehouse receipts, the statement reads. These updates make international digital trade smoother by speeding up document processing, improving security, and allowing for automated transactions with smart contracts.
The DIFC also amended its Security Law to adapt to recent advancements in international secured transactions, particularly those involving digital assets as collateral. The new legislation — which replaces DIFC’s 2005 Security Law — improves its securities regime, drawing from international models like UNCITRAL’s Model Law on Secured Transaction and incorporating provisions from the new Digital Assets Law.
