Dubai: A hub for digital assets and the introduction of the new DIFC Digital Assets Will
Dubai has in the recent years rapidly emerged as a global hub for digital assets, attracting businesses, investors and entrepreneurs.
Virtual Assets Regulatory Authority in Dubai – a world first
Driven by a commercially focused regulatory environment, the Government of Dubai have taken a proactive approach to regulating the cryptocurrency and digital asset sector. They are now the world’s first independent regulator for virtual assets – the Virtual Assets Regulatory Authority (“VARA”) established in March 2022.
In addition to VARA which applies to the Emirate of Dubai (onshore), the Dubai International Financial Centre (DIFC) financial free zone and its financial regulator – the Dubai Financial Services Authority (DFSA) have enacted the Digital Assets Law No 2 of 2024 on 8 March 2024 and which sets out a comprehensive set of rules governing digital assets, including virtual assets and cryptocurrencies.
DIFC wills – non-Muslim expatriates can file a will in English
From 2014, the DIFC Courts Wills Registry has since become the preferred registry for a large number of non-Muslim expatriates given that wills registered with the DIFC registry are governed by common law principles that are more familiar to expatriates than Sharia law principles of inheritance.
The DIFC allows a non-Muslim expatriate to file a will in the English language to govern who they want to inherit their estate after death. These assets can be located anywhere in the world, and can include property, cash, shares, bank accounts and personal possessions, for example.
As Dubai opens its doors to more and more expatriates looking to migrate to Dubai and consolidate their holding of assets through structures set up in the region, in a recent move, the DIFC courts have introduced a form of will that is specific to digital assets. The new Will template joins the extensive legacy Will types offered by the DIFC Courts, including the Full Will, the Property Will, the Financial Assets Will, the Business Owners Will and the Guardianship Will.
DIFC Digital Assets Will
With its introduction of the digital assets will, persons owning digital assets may either register a will specific to digital assets that they own, or alternatively, as part of a general broader Full Will.
The digital assets that are subject of the Digital Assets Will (or Full Will) are held within the DIFC court’s non-custodial wallet that is built on the Hedera distributed ledger technology. As of the date of this article, the DIFC non-custodial wallet supports Ethereum, Bitcoin, Matic, USD coin, Tether, Hedera and Hedera Token Service with the intention that such non-custodial wallet will be able to support NFTs.
Registration of wills in the DIFC
The DIFC has a Virtual Wills Registry which reinforces the digitally accessible service. This enables those living in the UAE and overseas to create and register a DIFC Courts Will. The process to register is very simple and is conducted online via a video conference call. The testator and their two witnesses can join the virtual call from anywhere in the world. The will is signed electronically using a touch screen device and the signed will is encrypted and securely stored in the DIFC Courts’ database.
With a Digital Assets Will, once the will is registered the testator will receive an email containing instructions to access their DIFC Courts’ non-custodial wallet. This enables the Testator to assign their digital assets to their named beneficiaries. The cost to register a Digital Assets Will is AED 5,000 for a single Will and AED 7,500 for mirror Wills.
On the death of the testator, the executor mentioned in the will must apply for a probate order from the DIFC Court. The probate order enables the executor to administer the estate of the deceased in accordance with the terms of the will. The process is streamlined to ensure seamless transition of assets after death which is a particularly helpful process for expatriates.
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