Is a Bitcoin Prohibition on the Horizon for the UAE?
The United Arab Emirates has enacted one of its most significant regulatory changes in recent years, and numerous crypto asset developers claim it effectively hinders self-custody services.
This alteration has sparked new worries regarding Dubai’s position as a key global center for digital assets. A recent Central Bank legislation, which came into force on September 16, broadens licensing criteria far beyond previous norms. According to the announcement, providing basic crypto tools, such as BTC wallets or even blockchain explorers, to residents of the UAE without authorization could be considered a criminal act.
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How Does The UAE’s Updated Financial Law Alter Licensing Standards?
Federal-Decree Law No. 6 of 2025, published in the nation’s Official Gazette, supersedes the UAE’s 2018 banking legislation.
https://TWITTER.com/StaniKulechov/status/1989262377834221811
The new structure establishes a much stricter regulatory boundary and indicates a more stringent approach toward unlicensed financial operations.
Previous regulations required companies to obtain licenses for specific financial services but did not impose criminal penalties on those who disregarded them. Legal insights from Gibson Dunn highlight that Article 170 classifies all unlicensed financial operations as a criminal offense.
Consequences range from imprisonment to fines between AED 50,000 and AED 500M, which amounts to as much as $136M. Notably, these penalties have an extensive reach. They are not solely directed at businesses providing financial products. They also encompass anyone involved in facilitating these services through technology.
Developer Mikko Ohtamaa cautioned that the legislation “criminalizes” the provision of self-custody BTC wallets, blockchain explorers, or even standard market-data tools like CoinMarketCap without a Central Bank license.
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The updated regulations encompass a broad spectrum of services, including infrastructure providers, API tools, digital wallet developers, analytics companies, and decentralized protocols. In essence, companies located outside of the UAE may still be subject to these rules if their products can be utilized by individuals within the country.
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What Implications Does The Central Bank’s Nationwide Oversight Have for VARA and ADGM?
The law becomes even stricter under Article 61, which considers any promotion, marketing, or advertising of a licensable financial activity as a regulated action.
This indicates that a company could incur a violation for distributing a newsletter, operating a website, or tweeting about an unlicensed financial product accessible to UAE residents. Gibson Dunn notes that this language “substantially expands” the regulatory boundaries and includes communications that originate overseas.
For international crypto businesses, this introduces an additional layer of crypto law risk. The UAE has been positioning itself as a center for distributed ledger innovation over the past few years.
Much of that advancement has been achieved through free-zone regulators like Dubai’s VARA and Abu Dhabi’s ADGM, which have provided clearer licensing pathways. However, federal law takes precedence over these local frameworks, and the new Central Bank regulations now apply throughout the country, including within the crypto-friendly zones.
This transition aligns with the nation’s broader strategy towards digital regulation. Strict regulations continue to be enforced across various online services, including the longstanding prohibition on WhatsApp calls. The main concern now is how developers, exchanges, and crypto wallet providers will react. Many may limit services available to UAE users to reduce legal liability.
Similar patterns have been observed in other regions where FATF pressure has compelled regulators to tighten rules surrounding self-custody and unlicensed access.
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The article Is a Bitcoin Ban About to Rekt the UAE? first appeared on 99Bitcoins.
