The UAE Central bank has published the full stored facilities regulation for physical and digital assets. On review of the regulation it is noticeable how the Central Bank defines crypto assets as cryptographically secured digital representations of value or contractual rights that use a form of distributed ledger technology and can be transferred, stored or traded electronically. This is the first time that the Central bank in the UAE defines crypto assets while acknowledging DLT and Blockchain technology and as such has legalized the usage, storage, and exchange of these assets.

The regulation also goes into detail when it comes to the terminology for money. The Central Bank of UAE defines money as assets or values, reward points, Crypto Assets, or Virtual Assets. The regulation provides an example, such as a value top-up of an SVF ( Stored Value Facility) account may take the form of values, reward points, Crypto-Assets, or Virtual Assets earned by the SVF Customer from making purchases of goods and services. Similarly, value received on the account of the SVF Customer may take the form of an online transfer of value, reward points, Crypto-Assets, or Virtual Assets between fellow SVF Customers.

Furthermore the Central Bank of UAE also discusses non device based stored value or what we know as digital wallets. The regulation defines digital wallets as a facility which has the value stored on a network-based account and can be accessed through the internet, a computer network or mobile network.  Examples include internet-based payment platforms or mobile e-wallets which provide “network-based accounts” with which Customers can store value for making payments for online and off-line purchases, or for person-to-person funds transfers.

As for virtual assets the UAE Central bank includes in its definition, the concept of digital tokens, digital currencies, utility tokens or asset-backed tokens) and any other virtual commodities, Crypto Assets and other assets of essentially the same nature.

When it comes to licensing the UAE Central Bank states that the Applicant must be a company incorporated in the State, including free zones but excluding Financial Free Zones, which would include DIFC and ADGM. In terms of capitalization, a licensee must maintain the following paid-up capital of at least 15 million Dirham (15,000,000 AED) or an equivalent amount in other currencies.

The full regulation can be found in this article. The regulation goes into all details including discussion with regards to setting up of  IT systems, cyber security requirements and other aspects.

The UAE Central Bank digital assets regulation is a huge step towards not only the digitization of money in the UAE but also the incorporation of innovative concepts such as digital wallets, crypto assets, virtual assets, by existing payment providers, banks and fintech innovators. It comes at a time when companies such as Paypal are now accepting payments in crypto currencies. 

The regulation set by Central Bank recently follows the crypto assets legislation ( recently translated to English)  published by the Securities and Commodities Exchange.