Dubai-based economic free zone DIFC gets rules governing Web3 companies

Dubai, an emerging global hotspot for Web3 events and businesses, has taken another crucial step towards making it more profitable for those interested. The Dubai International Financial Center (DIFC) has a layer of regulations specifically designed to oversee the Web3 space. This special economic free zone in Dubai was established in 2004. The free zone operates under the Dubai Financial Services Authority, DIFC’s exclusive independent regulator. With the influx of Web3 companies into Dubai, regulators believe there is an urgent need to introduce some new laws.

The legislation, known as the Digital Assets Act, adds a number of new Web3-centric rules while also making changes to existing law on contracts, obligations, security, damages, remedies and foundations.

“The DIFC is pleased to announce the enactment of the Digital Assets Law. We consider this legislation to be groundbreaking as it is the first to comprehensively spell out the legal characteristics of digital assets as property law and sets out how stakeholders can control, transfer and deal with Digital assets.” explain Jacques Visser, chief legal officer of the DIFC Authority, commented on the development.

In recent years, DIFC has been working hard to promote the flourishing development of Web3 companies entering economic free zones.Last August, DIFC decided to subsidize Web3 and 90% of licensing costs AI company.

Therefore, DIFC’s newly enacted law outlines digital assets like cryptocurrency and NFT It will be monitored, transferred and processed by industry players operating outside the DIFC Free Zone.

Visser said this is the first legislation in the UAE to comprehensively spell out the legal characteristics of digital assets, including digital assets in property law provisions.

“The purpose of the legislation is to ensure that DIFC laws keep pace with the rapid development of international trade and financial markets brought about by technological developments, and to provide legal certainty for investors and users of digital assets,” the DIFC authorities stated in official documents. The announcement post further provides Details of the revised rules.

Dubai is often hailed as the birthplace of Web3 and various emerging technologies. Back in 2022, Dubai’s cryptocurrency industry was subject to a new set of regulatory frameworks. At that time, the UAE also established the Virtual Assets Regulatory Authority (VARA) – an independent body that oversees governance in the cryptocurrency space. However, this law does not apply to DIFC as the free zone has its own governing body.