Crypto regulation: UAE adopts CARF, paving way for institutional trust

This October, as GITEX Global and the Future Blockchain Summit bring the world’s biggest names in fintech and digital assets under one roof, a quiet but profound shift is taking shape behind the scenes. It isn’t about a new token or blockchain breakthrough. It’s about trust, transparency, and the slow but steady institutionalisation of an industry that once thrived on rebellion.

The UAE’s decision to adopt the OECD’s Crypto Asset Reporting Framework (CARF) marks a pivotal moment in the region’s journey from crypto frontier to global regulatory leader. CARF, a global standard for the automatic exchange of information on crypto assets, will require exchanges, custodians, and wallet providers to collect and report details of users’ holdings and transactions to tax authorities. It mirrors how FATCA and CRS reshaped traditional finance, but with far-reaching implications for an industry built on decentralisation and anonymity.

Recommended For You

Tom Cruise to receive honorary Oscar in career first

Shah Rukh Khan makes history as first star with Dubai skyscraper named after him

UAE weather: Temperatures to drop; cloudy day expected

India: New Delhi car bomb accused appears in court

Dubai seizes 519 vehicles, 12,367 cylinders for illegal LPG filling, distribution

 

The rulebook is not yet in force. The UAE’s implementation timeline stretches to 2027, with the first exchanges of information expected by 2028, yet the market’s pulse is already changing. For exchanges, traders, and token issuers, CARF is both a test and an opportunity.

Raising the Bar for Exchanges

For crypto exchanges, the coming years will be defined by preparation. Amir Tabch, CEO of OFZA, draws a clear parallel between what lies ahead for digital asset platforms and what banks experienced a decade ago. “CARF will raise the operational bar for exchanges in much the same way FATCA and CRS transformed global banking,” he says.

Exchanges will need to overhaul how they onboard clients. That means gathering tax residency data alongside KYC information, tracking every taxable activity from spot trades to staking rewards, and building systems capable of reporting them in standardised formats. Compliance will no longer be a back-office concern. It will sit at the heart of the client experience.

The burden may be heavy at first, but Amir believes it is also an investment in credibility. “History shows that firms that adapted early to FATCA and CRS built trust. The same will happen here. Those who get compliance right will gain an edge in global legitimacy.”

At GITEX 2025, these themes are resonating strongly across roundtables on regulation and compliance. Panels featuring executives from Binance, Bybit, and Solana Foundation are exploring how frameworks like CARF could bring crypto closer to mainstream finance. The conversation has shifted from the speculative to the structural, from price charts to governance.

A Divided Investor Mood

The investor response to CARF depends on where one stands in the ecosystem. For institutional players, the shift is a welcome one. Standardised reporting and clear tax frameworks reduce uncertainty, and uncertainty, not regulation, has always been the biggest enemy of institutional adoption.

“If history is a guide, CARF will increase investor confidence,” says Amir. “Institutional players value clarity and standardised reporting, and CARF delivers exactly that.”

Yet for smaller investors, especially retail traders drawn to crypto’s aura of freedom and privacy, CARF could feel intrusive. DeFi Technologies, one of the firms watching the framework closely, Andrew Forson, President of DeFi Technologies, notes that confidence in the UAE has always stemmed from its openness to innovation.

“In as much as CARF’s requirements are not permitted to become burdensome, the impact will be negligible to positive,” said Andrew in a statement. “But if it forces project owners to divert time and resources into bureaucratic reports, it could have a cooling effect on innovation.”

That tension between transparency and freedom defines the moment. Retail investors may initially flinch at the loss of anonymity, but history suggests adaptation. FATCA once triggered similar fears in traditional finance. Over time, customers came to value the security that regulation brought.

The UAE, by joining CARF early, sends a signal. This is a market ready to evolve from speculative enthusiasm to institutional trust.

Transparency as the New Currency

To understand the magnitude of CARF’s impact, one must look beyond compliance checklists. Regulation, when done right, becomes a competitive advantage. For the UAE, it is an invitation to global capital that demands certainty.

“The biggest opportunity CARF creates is credibility,” Amir notes. “By embedding transparency, the UAE can cement itself as a hub for institutional capital, family offices, and long-term investors.”

Transparency is no longer the enemy of crypto. It is the passport to sustainability. As major economies move toward unified reporting, investors will gravitate to jurisdictions that embrace global standards rather than resist them. For exchanges, that means new possibilities such as tokenised funds, digital asset ETFs, and structured investment vehicles that can operate with regulatory confidence.

But the challenges are just as real. Compliance is costly. Building systems that can process massive volumes of data while respecting user privacy will stretch even the best-prepared platforms. “The tech sector is resource intensive,” President DeFi Technologies points out. “Anything that slows development will have a cooling effect. Innovation thrives where flexibility exists.”

It’s a fair warning. Every layer of oversight adds friction. The task for regulators will be to balance control with competitiveness, to ensure the UAE’s reputation as a haven for innovation remains intact while satisfying international tax standards.

The Ripple Effect on Innovation

Critics argue that frameworks like CARF could suffocate the very dynamism that made crypto exciting in the first place. But Amir Tabch sees it differently. “CARF is a catalyst for institutional adoption, not a brake on innovation,” he says.

His point is simple. Compliance breeds trust, and trust fuels growth. When FATCA and CRS came into play, they did not kill financial innovation. They professionalised it. The same, he believes, will happen in crypto.

Still, DeFi Technologies offers a counterweight. “Innovation in digital assets can never be slowed because it is driven by technologists,” the company notes. “But regulatory frameworks often add layers of bureaucracy that can stifle the release of technology that might truly benefit users. The cost of compliance can push innovation underground.”

This tug of war between regulation and innovation isn’t new. What’s different today is that Dubai and Abu Dhabi have built regulatory sandboxes that allow experimentation within structured environments. The UAE’s Virtual Assets Regulatory Authority and Abu Dhabi Global Market have already shown that oversight can coexist with creativity.

At GITEX’s Future Blockchain Summit, this balance will be on full display. With more than one thousand two hundred investors and one hundred and fifty exhibitors participating, the conversation is expanding from the promise of blockchain to the policy frameworks that will define its future. For companies like OFZA and DeFi Technologies, it’s an opportunity to position themselves as compliance first innovators ready for the next chapter of digital finance.

Lessons from the Past, Vision for the Future

The parallels with past regulatory revolutions are striking. When FATCA arrived, financial institutions scrambled to implement new data systems. Many smaller players exited the market. But those who adapted became industry leaders. The same pattern is likely to unfold in crypto.

Firms that embrace CARF early, investing in regulatory technology and cross-border reporting solutions, will find themselves ahead of the curve. They’ll be able to offer institutions what they crave most, certainty.

For the UAE, the move fits neatly into its broader ambition to become the world’s capital for regulated innovation. Whether it’s digital assets, AI governance, or green technology, the message is consistent. Innovation without oversight is unsustainable, and oversight without innovation is irrelevant.

GITEX’s theme this year, “From regulation to technical architecture,” captures that ethos perfectly. The future of crypto won’t be built in the shadows of decentralised dreams but in the sunlight of responsible regulation.

Building a Market That Endures

If CARF represents a microscope on the industry, it also offers a mirror. It forces exchanges, investors, and regulators to confront uncomfortable questions. Can crypto remain true to its principles while aligning with international norms? Can innovation and accountability coexist?

The answers are emerging slowly, but confidently. Amir Tabch believes CARF will ultimately drive a healthier ecosystem. “Over time, it will help shift the UAE market from speculative retail trading toward a more balanced ecosystem of institutional flows, product innovation, and investor trust,” he says.

That evolution is already visible in the UAE’s fintech sector. Tokenised real estate, green finance projects, and blockchain based trade platforms are moving into mainstream use. CARF will add the credibility these ventures need to attract global participation.

For investors, the short-term adjustment might bring paperwork and disclosure. For exchanges, it will demand new infrastructure. But the long-term reward is a mature, transparent, and globally connected marketplace.

A Defining Moment for the UAE

The UAE’s decision to align with CARF is more than a regulatory milestone. It’s a statement of intent. It shows a country that doesn’t fear scrutiny but welcomes it, confident that its systems can withstand global standards.

As the digital economy matures, investors are no longer looking for the wild west of finance. They’re looking for stability without stagnation and regulation without rigidity. Dubai and Abu Dhabi are positioning themselves precisely in that space, where ambition meets accountability.

GITEX 2025, with its co-location of fintech, blockchain, and regulatory innovation, offers the perfect backdrop for this transformation. The conversations unfolding there will shape not only the future of digital assets but also the story of how the UAE became the bridge between old finance and new.

In that sense, CARF isn’t the end of crypto’s freedom. It’s the beginning of its legitimacy. And legitimacy, in a world that has learned to question everything, might just be the most valuable asset of all.

Sana Eqbal

Staff Writer

• 

sana@khaleejtimes.com

Sana Eqbal is a journalist with over 10 years of experience and a media strategist specialising in corporate communications, public relations, digital media, and content management.