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Bitcoin (CRYPTO: BTC) remains legal in the UAE, but sweeping rules that took effect on Sep. 16 now force licenses on nearly every crypto tool, creating one of the world’s toughest self-custody crackdowns.
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The New Central Bank of the UAE Law expands the regulator’s oversight beyond traditional financial firms to include technology providers that facilitate financial activity.
Article 62 extends the regulatory perimeter to platforms, protocols, and digital tools that enable or support financial services, even when those services are not offered directly.
The framing significantly widens potential liability for companies operating in the region by treating facilitation as a regulated activity.
The law makes it a crime to provide digital asset “tools” to UAE citizens without a Central Bank license.
These tools include self-custodial Bitcoin wallets, blockchain explorers and market-data websites.
The only Bitcoin an individual may legally hold is Bitcoin permitted under Central Bank rules, marking a sharp departure from the open self-custody model common in most markets.
Under Article 170, penalties for unlicensed activity include imprisonment and fines ranging from 50,000 to 500 million dirhams, equivalent to as much as $136 million.
The scale of the fines represents a substantial escalation from the country’s 2018 framework.
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The UAE continues to maintain strict controls over communication services and online tools.
VoIP functions on apps such as WhatsApp remain blocked nationwide, and rights groups often cite these limits when evaluating digital freedoms.
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The expanded financial rules mirror this pattern and reinforce the country’s emphasis on centralized control within digital ecosystems.
Similar discussions have emerged in Estonia, Seychelles and parts of the European Union, where regulators have considered limits on noncustodial wallets, although few jurisdictions have adopted measures as broad as the UAE’s framework.
The new law introduces significant compliance considerations for firms operating in the region.
Companies offering noncustodial tools may need full licensing, which could require structural changes to existing products.
Developers and service providers face higher regulatory risk, and investors must consider how these requirements affect market access and business viability.
The rules also affect residents who rely on self-custody wallets or blockchain tools, creating potential barriers to commonly used digital asset services.
As a result, companies may reconsider expansion plans, and users may shift toward regulated custody models that carry fewer regulatory uncertainties.
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