The Dubai International Financial Centre (DIFC), renowned for being a unique economic hub with over 5,000 inhabitants, has recently unveiled significant legislative advancements.
These include the introduction of a pioneering digital assets law, a comprehensive security law, and modifications to pre-existing legislation.
Embedded within its own legal framework that draws from English law, the DIFC’s legislative reforms are strategically designed to align with the swift evolution seen in global trade and financial sectors.
These changes aim to offer legal clarity for both investors and users involved with digital assets.
In an official statement, the DIFC underscored the importance of these legislative updates in providing legal certainty in the rapidly evolving digital landscape.
Jacques Visser, the Chief Legal Officer at the DIFC Authority, highlighted the significance of these reforms by stating, “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.”
The newly introduced Digital Assets Law encompasses seven pages, supplemented by appendices, marking a comprehensive approach towards regulating digital assets.
Although the law amending several previous legislations to incorporate digital assets is noted, it wasn’t accessible online at the announcement time.
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Furthermore, the introduction of the Security Law 2024, which supersedes the 2005 law and its 2019 update, reflects a robust framework that integrates Financial Collateral Regulations.
This law is crafted in the spirit of the United Nations Commission on International Trade Law’s Model Law on Secured Transactions, ensuring alignment with global best practices.
The DIFC has also been proactive in refining its cryptocurrency regulations in 2022 and initiated incentives for AI and Web3 companies in 2023.
Demonstrating remarkable financial health, the DIFC reported a net profit of $203 million in 2023, marking a 45% increase from the prior year, alongside a 34% surge in new registrations.
This growth trajectory is further enriched by the diversification of its ecosystem, including a notable rise in hedge fund operations and an expansion of businesses from Europe and the United States.
While the DIFC’s Digital Assets Law is positioned as an innovative legislative move, it’s important to acknowledge that other jurisdictions, including China, Singapore, and Hong Kong, have also recognized digital assets as property through judicial decisions in the preceding year.
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