The Dubai Financial Services Authority (DFSA) has implemented a significant update to its Crypto Token Regulatory Framework within the Dubai International Financial Centre (DIFC), marking a pivotal regulatory shift. A key outcome is the official recognition of Ripple's stablecoin, RLUSD, for use in the financial hub. RLUSD joins a very select group of only three stablecoins deemed compliant under the new rules, alongside Circle's USDC and EURC.
The DFSA confirmed that these three tokens are now approved for use by licensed firms operating within the DIFC. The regulator clarified that this recognition signifies the tokens meet Dubai's current regulatory standards, though it is distinct from a formal licensing process. The approval represents a major milestone for Ripple, strengthening its footprint in a region actively positioning itself as a global digital asset hub.
A fundamental change in the framework is the shift of token suitability assessments from the regulator to licensed firms. The DFSA will no longer publish or maintain a list of recognized crypto tokens. Instead, licensed entities must now document and justify their own decisions on whether a crypto token meets the DFSA's suitability criteria, evaluating risks related to governance, technology, market behavior, and compliance controls.
The updated policy introduces stricter controls, explicitly excluding privacy-focused tokens like Monero and Zcash from the DIFC. It also adds new requirements for crypto asset managers and investment funds. The DFSA emphasized that approved stablecoins must be fully backed by reserves held entirely in the same reference currency, which excludes algorithmic stablecoins and tokens backed by crypto assets or private credit. This criteria explains the exclusion of other prominent stablecoins like DAI.
Charlotte Robins, managing director of policy and legal at the DFSA, stated, "The DFSA’s enhancements to the Crypto Token regime reflect our progressive stance on innovation and proactive response to market developments and feedback." The new principles-based approach creates greater consistency with the model used in Abu Dhabi's financial zone, though crypto oversight across the wider United Arab Emirates remains divided among several regulators.
