Cryptocurrency is here and seems to stay for a long time. So, what is its legal status in the UAE governed mostly by Shariah laws and principles? Currently, the UAE’s laws consider cryptocurrencies as neutral, neither halal nor haram and it is not yet recognised as an official currency.

As usual, there are critics and supporters. The critics have concerns about the speculative nature and volatility of cryptocurrencies, which complicate their acceptance as legitimate financial assets. On the other hand, the proponents assert that its decentralized nature and independence from government control make it a more Islamic form of money compared to fiat currencies, which are linked to interest-based systems.

Thus, the UAE’s regulatory framework for cryptocurrencies remains work in progress. While personal use and mining are permitted, the UAE Central Bank has yet to issue comprehensive regulations for commercial cryptocurrency transactions. Currently, commercial cryptocurrency activities are restricted to licensed operations within regulated free zones, such as Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM). It remains to be seen what the expected regulations on the commercial cryptocurrency use will bring.

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