The United Arab Emirates has brought into force Federal Decree-Law No. 6 of 2025, a new central bank law that expressly recognises the Digital Dirham, the currency issued in digital form by the Central Bank of the UAE (CBUAE), as legal tender. The decree-law was issued on 8 September 2025, published in the Official Gazette on 15 September and took effect on 16 September 2025.
It repeals Federal Law No. 14 of 2018 regarding the Central Bank and the Organization of Financial Institutions and Activities, and Federal Decree-Law No. 48 of 2023 Regulating Insurance Activities. In their place it establishes a single legal framework for banking, insurance and other licensed financial institutions, as well as financial market infrastructures.
WIDER REGULATORY PERIMETER
The new law extends the CBUAE's licensing remit to open finance services, payment services using virtual assets, and technology providers, including digital platforms, decentralised applications and protocols, that facilitate financial services. It distinguishes virtual assets from currency issued in digital form, the category that covers the Digital Dirham.
The CBUAE's supervisory toolkit is strengthened, including early intervention and resolution powers over distressed institutions, and the maximum administrative fine rises to AED 1 billion from AED 200 million. Consumer protection provisions include a prohibition on compound interest on customer credit facilities, and environmental, social and governance principles are integrated into the central bank's statutory functions.
ONE-YEAR TRANSITION
Institutions that fall within the scope of the law have a one-year transitional period, running until 16 September 2026, to bring their operations into compliance. The CBUAE has discretion to extend that period.
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