DFSA Amends Crypto Legislation, Bans Privacy Tokens

• The DFSA has amended its rules guiding the crypto industry.
• DFSA’s new regulation prohibits the use of privacy tokens.
• An executive of the regulator said the ban on privacy tokens was “unavoidable.”

The Dubai Financial Services Authority (DFSA) has amended its rules guiding the digital currency industry. According to its latest publication, the regulator noted that the rules adjustment follows the conclusion of a consultation period, which led to the adoption and implementation of changes to the original rulebook.

DFSA New Rules Take Effect From January 12, 2026

According to the DFSA, most of the effective changes take effect from Monday, January 12, 2026. It will mark a new era in virtual assets legislation within the region. The DFSA highlighted seven sections of the rulebook where adjustments will be implemented immediately, alongside two other sections scheduled for implementation from July 1.

In the meantime, the ban imposed on privacy tokens for use across Dubai stands out as one of the most prominent revisions in the region’s rules guiding the use of virtual assets. According to reports, the use of such tokens is prohibited across the Dubai International Financial Centre (DIFC), mainly due to anti-money laundering (AML) and sanctions compliance risks.

A Change in the Regulator’s Approach

Meanwhile, the new set of rules, which shifts token approval responsibility onto companies and tightens the definition of stablecoins, redefines the DFSA’s regulatory function. It has revolutionized the regulator’s approach, positioning it as an entity focused less on individual crypto assets and more on enforcing global compliance standards.

Monero Hits Record Price Despite “Unavoidable” Ban in Dubai

It is worth noting that Dubai’s ban on privacy tokens comes amid renewed interest in privacy coins such as Zcash and Monero, with the latter reaching a $598.5 all-time high on Monday, according to data from TradingView. The current trend signals crypto users’ efforts to maintain anonymity within the ecosystem amid growing enforcement of transparency and tax rules across the globe.

According to the DFSA’s associate director of policy and legal, Elizabeth Wallace, the ban on privacy tokens is an unavoidable decision for a jurisdiction that aims to remain aligned with international regulatory norms. Wallace noted that it is nearly impossible for firms to comply with Financial Action Task Force requirements if they are trading or holding privacy tokens.

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