Fact-Check: How a Misleading Campaign Turned the UAE’s New Financial Law Into ‘Bitcoin Ban’ Headlines
Claims that the UAE has “banned Bitcoin” and “criminalized self-custody wallets” have spread rapidly across social media over the past week. The allegations emerged following the publication of the new UAE Central Bank Law, officially known as Federal Decree-Law No. 6 of 2025. Several viral posts on X, including one asserting that “no wallet, no Bitcoin, no problem,” suggested that the UAE now treats self-custody tools, blockchain explorers and market-data websites as illegal without a Central Bank license. These interpretations have triggered confusion among crypto holders in Dubai and Abu Dhabi, as well as companies operating in the virtual asset space.
A closer examination of the UAE Central Bank Law shows that these claims are misleading. The text of the law does not ban Bitcoin ownership, does not prohibit self-custody, and does not criminalize the use of blockchain explorers or crypto-analytics platforms. Instead, it expands the regulatory perimeter for financial institutions and introduces stricter licensing requirements for companies involved in payments, remittances and other financial services, including those that may use virtual assets.
How the Viral Claims Started
The online discussion began when several posts on X framed the law as a direct UAE Bitcoin ban, leading even respected figures like Stani Kulechov to briefly adopt this misinterpretation. One widely circulated thread alleged that offering a self-custody wallet or even operating a blockchain explorer would be considered a criminal act unless licensed by the Central Bank. This narrative quickly appeared in global crypto media, with headlines describing “Bitcoin ban fears,” “illegal wallets,” and “harsh penalties for offering crypto tools in the UAE.” These articles referenced Article 62 and Article 170 of the new law, but often removed the wider context that defines what is considered a Licensed Financial Activity in the UAE.
The reach of these claims grew when media outlets republished them without additional verification, creating the impression that self-custody itself had become illegal. As a result, many readers interpreted the regulatory update as a sweeping ban on Bitcoin rather than a continuation of the UAE’s shift toward a more structured financial framework.
What the UAE Central Bank Law Actually Regulates
Federal Decree-Law No. 6 of 2025 consolidates previous banking and insurance laws into a unified framework. The law defines the roles of financial institutions, payment service providers and technology companies that facilitate financial activities in the UAE. The most discussed section, Article 62, states that any person who carries on, offers, issues or facilitates a Licensed Financial Activity must be licensed by the Central Bank.
The licensed activities referenced in the law involve payments, credit, deposits, money exchange, remittances and investment services, including payment services using virtual assets. The law also introduces a one-year reconciliation period, giving companies time to comply and assess their regulatory position. Crucially, holding Bitcoin, using a hardware wallet or managing digital assets privately does not fall within the definition of a Licensed Financial Activity.
Why the Bitcoin Ban Narrative Is Incorrect
Nothing in the text of the UAE Central Bank Law prohibits individuals from owning or storing Bitcoin. The law does not classify self-custody wallets as illegal, nor does it prevent users from transacting with blockchain networks. The wording focuses on financial service providers, not on individuals who simply hold or transfer virtual assets for personal use.
The misconception stems from the law’s reference to platforms and technological infrastructure that “facilitate” financial services. Several commentators interpreted this language broadly, assuming that any tool interacting with Bitcoin could be considered a financial service. However, legal analysis from major international law firms confirms that the scope relates to companies offering regulated activity, not to personal wallets or blockchain interfaces used for private purposes.
The strict penalties introduced under Article 170, which include fines up to AED 500 million and possible imprisonment, apply specifically to entities that operate a Licensed Financial Activity without authorization. They do not apply to individuals who hold Bitcoin in cold storage, use non-custodial wallets or access blockchain data.
How This Affects Crypto Companies in the UAE
The updated regulatory perimeter is significant for companies providing payments infrastructure, remittance services or virtual-asset-based financial services in the UAE. Firms offering wallet infrastructure that enables payments, apps that process virtual asset transfers or platforms that operate as intermediaries may fall under the Central Bank’s jurisdiction even if they are not traditional financial institutions. This is intentional, as the UAE seeks to align fintech, payments and digital-asset activities under a unified supervisory structure.
However, the law does not override the frameworks established by free-zone regulators such as ADGM and DIFC, nor does it replace the virtual asset regime overseen by Dubai’s VARA. These regulatory systems continue to operate in parallel, each governing different components of the financial and digital asset ecosystem.
The Real Impact of the Law — Clarity, Not a Bitcoin Ban
The new UAE Central Bank Law strengthens oversight across payment systems and digital infrastructure, but it does not impose a UAE Bitcoin ban. Instead, it creates a clearer and more mature licensing pathway for companies involved in virtual-asset-linked financial services such as payments and remittances. The misconception emerged because some commentators interpreted the law as targeting personal use, when in reality it focuses on service providers, not individuals.
For UAE residents, nothing in the law restricts holding Bitcoin, using self-custody wallets or interacting with blockchain networks. For companies, the message is simple: ensure compliance and understand where your products fall within the definition of a Licensed Financial Activity.
The claim that the “UAE crypto paradise is over” misunderstands the country’s strategy. The UAE was never positioned to be a regulatory wild west; it aims to be a regulated environment that fosters innovation, protects investors and integrates digital assets responsibly into the financial system. This law reflects that direction. As the framework evolves, further guidance from UAE regulators is expected, supporting both innovation and market stability.
