This newly implemented legislative structure is designed to provide a "comprehensive framework for DLT Foundations and Decentralised Autonomous Organisations (DAOs), enabling them to operate and issue tokens recognising the unique needs of the Blockchain industry." 

The DAL lays down the foundational legal characteristics of a Digital Asset as a matter of property law. It addresses issues such as how one acquires and transfers title to a digital asset, how a digital asset should be characterised as a matter of property law, and the circumstances under which one can sue a third party for interfering with the use of a digital asset.

Deadline for comments is 5 November 2023.

The paper seeks comments on the DFSA's proposals to make several amendments to its policy framework, including proposals in relation to the Crypto Token regime that will result in changes to the DFSA Rulebook.

Deadline for comments is 26 May 2023.

The first phase of the CBDC Strategy is expected to be completed over the next 12 to 15 months and comprises three major pillars. The first is the soft launch of project mBridge, a collaboration between the Bank for International Settlements, the Hong Kong Monetary Authority, Bank of Thailand and People's Bank of China, to facilitate real value cross-border CBDC transactions for international trade settlement. 

The second pillar is proof-of-concept work for bilateral CBDC bridges with India, and the third pillar is proof-of-concept work for domestic CBDC issuance covering wholesale and retail usage. 

H.E. Khaled Mohamed Balama, Governor of the Central Bank of UAE, said: “The launch of our CBDC strategy marks a key step in the evolution of money and payments in the country. CBDC will accelerate our digitalisation journey and promote financial inclusion.”

The central banks signed a memorandum of understanding on 15 March 2023 to explore interoperability between the CBDCs of both countries and to "jointly conduct proof-of-concept  and pilot(s) of bilateral CBDC bridge to facilitate cross-border CBDC transactions of remittances and trade." 

The regulatory framework is focused on the risks that each virtual asset activity presents to the market, and seeks to provide virtual asset service providers (VASPs) with a "clear framework of rules which apply to their particular operations and business models, while maintaining a baseline market standard of compliance across core regulatory domains."

VASPs that fulfil VARA's licensing requirements will be required to comply with four Compulsory Rulebooks:

Company Rulebook;

Compliance & Risk Management Rulebook;

Technology & Information Rulebook; and 

Market Conduct Rulebook.

Additionally, seven activity-specific Rulebooks have been developed to cater for risks associated with the provision of each virtual asset activity:

Advisory Services Rulebook;

Broker-Dealer Services Rulebook;

Custody Services Rulebook;

Exchange Services Rulebook;

Lending & Borrowing Services Rulebook;

Payments & Remittances Services Rulebook; and 

Management & Investment Services Rulebook.

VASPs will be required to comply with each activity Rulebook only if they are licensed by VARA to offer the activity.

The regime covers not only AML/CFT risks in respect of trading, clearing, holding or transferring crypto tokens, but also addressing risks relating to consumer protection, market integrity, custody and financial resources for service providers.

The DFSA has extended the scope of many current financial services activities, for example, advising, dealing, arranging, trading and custody, to allow firms in the DIFC to be able to provide products and services in relation to crypto tokens.

Firms, whether currently authorised by the DFSA or not, that want to provide financial services in relation to crypto tokens in or from the DIFC will have to obtain a license from the DFSA by first submitting a pre-application via the DFSA website. 

The pilot, which was conducted from 15 August to 23 September 2022, covered three transaction types: issuance and redemption of CBDC between commercial banks and central banks; cross-border payment in local CBDC between commercial banks; and cross-border exchange of local CBDC against foreign currency CBDC between commercial banks. The 20 banks in the four jurisdictions used the mBridge platform to conduct 164 payment and foreign exchange transactions totalling over $22 million over six weeks, settled directly on the platform.