The United Arab Emirates has launched a transformative milestone in its financial sector with the enactment of Federal Decree Law No. (6) of 2025, which came into effect on September 16. This landmark legislation represents one of the most comprehensive reforms in the UAE’s financial landscape, modernizing and unifying regulatory frameworks across banks, insurance and reinsurance companies, fintech firms, virtual asset providers, and other licensed financial institutions. By consolidating and replacing earlier decrees, the law creates a streamlined and cohesive legal environment, reflecting the UAE’s commitment to global best practices and ensuring stability in an era of rapid technological and economic change.
A key feature of the law is the expanded powers granted to the Central Bank of the UAE (CBUAE). The central bank can now intervene decisively in non-viable institutions, replacing management, appointing resolution administrators, or even establishing temporary bridge entities to maintain continuity of essential services. The law also introduces mechanisms such as bail-ins and the creation of asset management vehicles to handle non-performing or difficult-to-value assets, helping safeguard financial stability and prevent systemic contagion.
In addition to institutional oversight, the legislation significantly enhances regulation of fintech and digital financial services. Mobile wallets, payment gateways, tokenized payments, and virtual assets now fall under the CBUAE’s supervision, with minimum standards for cybersecurity, operational resilience, and data protection enforced across the board. Consumer protection has been strengthened through stricter penalties for misconduct, such as mis-selling financial products, hidden fees, or failure to resolve complaints, ensuring trust and transparency in financial interactions.
S&P Global Ratings notes that the law broadens regulators’ remit into previously under-regulated areas, such as digital payments and virtual assets, and emphasizes that effective implementation will be critical. While immediate credit rating changes are not expected, the law strengthens institutional governance, risk management, and market transparency. Ultimately, this reform positions the UAE as a forward-looking financial hub, capable of supporting innovation, safeguarding consumers, and maintaining systemic stability, while fostering confidence among investors, businesses, and the wider global financial community.
This law is more than legislation; it is a roadmap for a secure, innovative, and resilient financial future in the UAE.