Image Credit: Supplied

Dubai: Dubai International Financial Centre (DIFC) enacts the world’s first Digital Assets Law, a new Law of Security and related amendments to select existing legislation.

Digital Assets Law

Following an extensive review of the legal approaches to digital assets in multiple jurisdictions in 2023, DIFC is now enacting its own Digital Assets Law.

Existing DIFC laws, such as the Contracts Law, Law of Obligations, Law of Security, Law of Damages and Remedies, Trust Law and Foundations Law, have also been updated to cater to specific issues arising about this asset class.

Electronic Transferable Records

Updates to the Law of Obligations also provide information on using electronic transferable records. Electronic transferable records are functionally equivalent to paper trade documents or instruments such as bills of lading, bills of exchange, promissory notes and warehouse receipts. Recognition of such documents in electronic form facilitates greater efficiencies within cross-border digital trade by increasing the speed and security of the transmission of documentation and allowing for the automation of certain transactions through smart contracts.

Law of Security

Following consideration of regimes in other jurisdictions, DIFC is repealing the 2005 Law of Security and replacing it with a new law to enhance DIFC’s securities regime significantly. The new law will align the regime with international best practices and clarify the importance of taking security over digital assets.

Jacques Visser, Chief Legal Officer at DIFC Authority, said: “DIFC is excited to announce the enactment of its Digital Assets Law. We consider this legislation groundbreaking as the first legislative enactment to comprehensively set out the legal characteristics of digital assets as a matter of property law and to provide for how digital assets may be controlled, transferred and dealt with by interested parties.”