The United Arab Emirates has introduced one of its biggest regulatory shifts in years, and many crypto developers say it effectively blocks self-custody services.
The change has raised fresh concerns about Dubai’s role as a major global hub for digital assets. A new Central Bank law, which took effect on September 16, expands licensing rules far beyond previous standards. Under the update, offering basic cryptocurrency tools, including Bitcoin wallets or even blockchain explorers, to UAE residents without approval could be treated as a criminal offense.
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How Does the UAE’s New Financial Law Change Licensing Requirements?
Federal-Decree Law No. 6 of 2025, published in the country’s Official Gazette, replaces the UAE’s 2018 banking law.
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The new framework sets a much stricter regulatory perimeter and signals a tougher stance on unlicensed financial activity.
Earlier rules required firms to get licenses for certain financial services, but they didn’t impose criminal charges on those who ignored them. Legal guidance from Gibson Dunn says Article 170 turns all unlicensed financial activity into a criminal offense.
The penalties range from jail time to fines between AED 50,000 and AED 500M, or up to $136M. What stands out is how far the law now reaches. These punishments don’t apply only to firms offering financial products. They also extend to anyone who helps deliver these services through technology.
Developer Mikko Ohtamaa warned that the law “makes it a crime” to provide self-custody Bitcoin wallets, blockchain explorers, or even common market-data tools such as CoinMarketCap without a Central Bank license.
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The new rules cover a wide range of services, including infrastructure providers, API tools, wallet developers, analytics firms, and decentralized protocols. In simple terms, even companies based outside the UAE can fall under these requirements if their products can be used by people inside the country.
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What Does The Central Bank’s Nationwide Oversight Mean for VARA and ADGM?
The law tightens further under Article 61, which treats any advertising, marketing, or promotion of a licensable financial activity as a regulated act.
That means a company could face a violation for sending a newsletter, running a website, or posting a tweet about an unlicensed financial product that UAE residents can access. Gibson Dunn says this language “materially broadens” the regulatory boundary and pulls in communication that originates from abroad.
For global crypto firms, it adds another layer of compliance risk. The UAE has spent the past few years presenting itself as a hub for blockchain development.
Much of that progress came through free-zone regulators such as Dubai’s VARA and Abu Dhabi’s ADGM, which offered clearer paths for licensing. But federal law overrides those local frameworks, and the new Central Bank rules now apply nationwide, including inside the crypto-friendly zones.
The shift also fits the country’s broader approach to digital regulation. Strict controls remain in place across many online services, including the long-standing block on WhatsApp calls. The key concern now is how developers, exchanges, and wallet providers will respond. Many may restrict services for UAE-based users to limit legal exposure.
Similar trends have emerged in other regions where FATF pressure pushed regulators to tighten rules around self-custody and unlicensed access.
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The post Is a Bitcoin Ban About to Rekt the UAE? appeared first on 99Bitcoins.
