What is crypto?

Cryptocurrency is a new kind of digital currency or decentralized money that is sometimes shortened to “crypto.” Cryptocurrency is decentralized, which means it is not controlled by a central authority such as a bank or government and is instead traded between individuals.

Cryptocurrency on blockchain

Cryptocurrencies allow users to make secure payments with other individuals and also allow them to deposit their money without the involvement of third party i.e. banks with the help of decentralized technology.

They are based on the blockchain, also referred to as Distributed Ledger Technology (DLT), which is a digital ledger of transactions that keeps track of all transactions and is maintained by currency owners.

Each block in the chain comprises a number of transactions, and whenever a new transaction happens on the blockchain, a record of that transaction is recorded to the ledgers of every participant which cannot be deleted or altered with the help of a digital signature called as hash.

This feature of blockchain technology assures that no one can hack into the system or change the information stored in the present block or previous blocks.


Regulatory authorities on Crypto assets in UAE

The financial regulatory authorities are divided into two zones:

  1. Financial free zones include:


  • Abu Dhabi Global Markets (“ADGM”) – regulated by Financial Services Regulatory Authority (FSRA)

FSRA has published its first guidance on Regulation of Crypto Asset Activities in ADGM in 2018, and further, it has been amended several times. On 24th February 2020, FSRA has issued its updated guidance on – Regulation of Virtual Asset Activities in ADGM (“the guidance”), wherein the term ‘crypto assets’ has been renamed as ‘virtual assets’.

The primary focus of this Guidance is on the FSRA’s regulatory treatment of Virtual Assets and the financial services activities that can be conducted in relation to Virtual Assets within ADGM.


  • Dubai International Financial Centre (“DIFC”) – regulated by Dubai Financial Service Authority (DFSA)

On 29th March 2021, DFSA has published its Framework for Regulating Security Tokens for public comments, in the form of a consultation paper (Consultation Paper no. 138).

Although this consultation paper has proposed a provision relating to the cryptocurrencies, stating that, “a crypto asset can be created, stored and transferred using a DLT application”, the provisions proposed in this paper are not intended only for use with cryptocurrencies, virtual currencies, or other forms of trade. This proposal, on the other hand, is aimed toward Security Tokens.

  1. The rest of the UAE includes onshore and non-financial free zones. (“Onshore UAE”).

If cryptocurrencies are deemed to be a product such as metal or security such as stock, they may fall under the jurisdiction of the UAE Securities and Commodities Authority (“SCA”), whereas if they are deemed to be a currency such as AED or USD, the UAE Central Bank (“Central Bank”) may be responsible

Central Bank of UAE (CBUAE)

The CBUAE has made a statement asserting that as of currently, the CBUAE does not recognize (or acknowledge) crypto-assets or virtual assets as legal money in the United Arab Emirates, and it may only be utilized as high-risk investment assets. The UAE dirham is the country’s only legal currency.

Generally speaking, as of today, there is no specific legislation as a whole on cryptocurrency in UAE.