UAE Bitcoin Law Sparks Global Debate: What the New Rules Mean for Crypto Users

The UAE bitcoin ecosystem is facing one of its biggest regulatory changes ever. However, a sweeping new Central Bank law, effective since September 16, 2025, has redrawn the boundaries of crypto overnight. Yet, the Bitcoin UAE trading is still legal. 

However, this new framework has criminalised offering unlicensed crypto tools, including self-custody wallets, blockchain explorers, and market-data platforms. This unprecedented move has alerted the global developers, investors, and crypto enthusiasts, as the UAE has long been viewed as a friendly hub for digital assets.

What Triggered the Controversy?

The debate started when industry members claimed the UAE had banned Bitcoin. However, a closer look shows that holding or trading Bitcoin is still legal. Yet, it has also become a criminal offence. Moreover, this distinction has been confusing, but the underlying message is clear that the UAE wants full regulatory visibility and control over all crypto-related services.

New UAE Bitcoin Law Expands Central Bank Authority

Now, the UAE Central Bank regulates traditional financial firms and any technology that initiate financial activity under the Federal-Decree Law No. 6 of 2025. Below is the list of those activities:

• Self-custodial Bitcoin wallets
• Blockchain explorers
• Market data and price-tracking sites (e.g., CMC-style tools)
• API providers and decentralised protocols

Article 62 makes it illegal to offer, facilitate, or promote such tools to UAE residents without a Central Bank license. Moreover, even foreign companies online might be liable, which is a concern for the global platforms serving the UAE users. 

Penalties: Fines Up to AED 500 Million

The enforcement is tougher than the previous crypto rules. However, the following is the list of those penalties:

• Penalties range from AED 50,000 to AED 500 million
• Violators may face imprisonment
• Even advertising unlicensed services could be considered a regulated activity under Article 61

This significantly raises the compliance risk for startups, developers, and content creators. However, a crypto developer said, “Only Bitcoin you are allowed to own is one permitted by the Central Bank of the UAE.”

No — Bitcoin Is NOT Illegal in the UAE

Despite viral social media claims, the law does not ban Bitcoin. Below are the key clarifications of this confusion:

• UAE residents can legally hold Bitcoin
• Trading Bitcoin is still allowed
• The restrictions target issuers, developers, and service providers — not the individual buyers

The confusion came from how broad the definition of the law is, especially regarding “tools” that support financial activity. 

UAE Aligns With Global Crypto Transparency Standard

The Ministry of Finance has also announced that the UAE will start sharing crypto financial data globally from 2028 under OECD’s CRS 2.0 and Crypto Asset Reporting Framework (CARF). Moreover, the crypto firms are required to implement the following standards from the 1st of January 2027:

•  Due diligence
• Audits
• Customer reporting procedures

This positions the UAE as a compliant global financial hub, aligning with over 100 countries participating in tax transparency exchanges.

Impact on Developers, Investors & UAE Users

For Developers

• Higher compliance costs
• Possible exit from the UAE market
• Need for full Central Bank licensing, even for open-source tools
  

For Businesses

• New risk assessments required before entering UAE market
• Structural changes to existing crypto products
• Greater scrutiny for wallet and blockchain-infrastructure platforms
  

For Everyday Users

• Self-custody becomes more restricted
• Users may shift to Central Bank-approved custodial services
• Access to certain platforms may be limited
  

The new law might redefine the image of the UAE from a crypto-friendly hub to a highly controlled but regulated digital asset environment.

The latest law of the UAE marks a big turning point for the UAE bitcoin landscape. However, these strict licensing requirements could reshape how crypto tools, wallets, and platforms operate in the region.

Read more:

Abu Dhabi Launches First Fully UAE Driverless Vehicle Operations in MENA

Dubai Airshow 2025 Set for Major Aviation Milestones, Strategic Jet Orders and New Tech Showcases

Yo Yo Honey Singh to Kick Off ‘My Story World Tour 2026’ in Dubai