Dubai's regulatory framework undergoes major overhaul: token review authority delegated downward, privacy coins face stricter scrutiny

【Blockchain Rhythm】The Dubai Financial Services Authority (DFSA) recently made an important decision. Starting from January 12, they completely changed their approach to regulating cryptocurrencies — no longer reviewing tokens on a case-by-case basis by regulators, but requiring companies licensed to operate in the Dubai International Financial Centre (DIFC) to make their own judgments.

What exactly has changed? The revised rules took effect this Monday. Previously, if a company asked the DFSA “Can we use this token or not,” the DFSA would give an answer. Now, it’s different — the DFSA no longer maintains a list of approved tokens, and companies must evaluate tokens based on the DFSA’s applicability standards. This effectively shifts the responsibility for review from regulators to market participants.

This shift has been brewing for some time. As early as October 2025, the DFSA initiated a consultation process. Over the past three years, they have been observing market developments and communicating with industry insiders, ultimately deciding that the framework should align with global standards. The result is this major adjustment.

The new framework does not explicitly prohibit specific digital assets, appearing quite flexible. But this flexibility has a consequence — privacy coins like Monero and Zcash could be at a disadvantage. These tokens might suddenly be classified as high-risk assets by compliance departments of various companies. Some may impose stricter due diligence requirements on them, while others may simply stop supporting them. As a result, the activity space for privacy coins in the Dubai market could be significantly compressed.