The Dubai Financial Services Authority (DFSA) has prohibited privacy tokens, such as Monero and Zcash, across the Dubai International Financial Centre, citing anti-money laundering (AML) and sanctions compliance risks. The ban applies to trading, promotion, fund activity, and derivatives linked to privacy coins. The DFSA emphasized that privacy features, which obscure transaction history and holders, prevent firms from meeting Financial Action Task Force (FATF) requirements. Regulated entities are also barred from using mixers, tumblers, or other obfuscation tools.
The DFSA revised its framework for stablecoins, defining “fiat crypto tokens” as those pegged to fiat currencies and backed by high-quality, liquid assets capable of meeting redemption demands under stress. Algorithmic stablecoins, such as Ethena, would no longer qualify as stablecoins but remain tradable as general crypto tokens. The rules align Dubai’s approach with international regulators that prioritize asset quality, transparency, and liquidity in stablecoin classifications.
The updated framework transitions token approval responsibility from the regulator to licensed firms. Companies must now assess token suitability, document decisions, and maintain ongoing reviews. DFSA officials described this approach as reflecting market maturity and international norms, emphasizing accountability and compliance over supervisory endorsement. The framework encourages firms to manage risks associated with crypto listings while ensuring traceability and adherence to global standards.
