Changes to digital asset law in the US, China and the UAE

In 2026, global digital asset laws will move from implementation to operation, with a major focus on oversight of stablecoins, real-world tokenized assets, and tax compliance. These are the key changes during February in the United States, China and the United Arab Emirates.

USA

In 2026, US cryptocurrency legislation will enter a transformative phase focused on finalizing market structure and implementing the first major federal digital asset laws. USA Law of clarityScheduled to implement in 2026, it is a proposed US legislation designed to establish a regulatory framework for digital assets, primarily giving the Commodity Futures Trading Commission jurisdiction over most digital assets. Like William Quigley, cryptocurrency and blockchain investor and co-founder of WAX and Tether (USDT), explained:

“The Clarity Act, which is expected to become law this year, aims to distinguish between commodities and securities, requiring exchanges and traders to register with the CFTC and adhere to consumer protections.”

Treasury Secretary Scott Bessent. called for a “spring signing” of the bill, noting that the 2026 midterm elections create significant urgency to pass the legislation before the political window closes.

Current legislative status of the Clarity Law

Porcelain

During February, Chinese authorities strengthened their rules on digital payments through the sovereign digital yuan (e-CNY) and controlled tokenization projects. The new regulations prohibit the unauthorized issuance of yuan-pegged stablecoins (both domestically and abroad) and mandate strict vetting of real-world tokenized assets, reinforcing the dominance of state-backed e-CNY. Key details about China’s stablecoin regulations for 2026 are as follows:

Ban on unauthorized stablecoins: Notice of February 6, 2026 issued Eight government agencies reiterated that all virtual currency activities are illegal, specifically targeting stablecoins that replicate sovereign money. Yifan He, founder and CEO of Red Data Tech, explained:

“I think the most significant aspect is that the authorities removed stablecoin from the definition of cryptocurrencies. Comparing these two to last November, stablecoin is no longer mentioned alongside cryptocurrencies and RWAs. The only mention is to state that ‘fiat-pegged stablecoin partially functions as money’. This is a big policy change regarding stablecoin. This could mean giving the green light to Chinese banks in Hong Kong to apply for the Hong Kong stablecoin license.”

There are no stablecoins pegged to the yuan: The new regulations prohibit any entity (including foreign ones) from issuing renminbi (RMB)-pegged stablecoins abroad without explicit approval.

Extraterritorial restrictions: Chinese domestic entities and their subsidiaries are strictly prohibited from issuing virtual currencies or conducting RWA tokenization outside of China without consent. As Yifan added:

“Assisting illegal crypto businesses from within China (even for projects outside of China), including promotion, IT development and advice, will face severe criminal punishment. This is going to the next level.”

RWA tokenization rules: While some market participants see potential for a regulatory framework for tokenized real-world assets (RWA), the 2026 rules impose strict supervision in this sector, requiring approval for any tokenization of RWA, especially if it involves onshore assets. As Yifan He explained:

“In the circulars, RWAs are completely banned. In the last two days, many people in the RWA industry have tried to confuse people with RWAs and ‘tokenized security’ and claim that the Chinese government is officially offering a clear path to legalizing RWAs. It is not. The path now is a complete ban.”

However, “it gives a clear path for ‘tokenized securities’. This is the positive side of the circulars. But since these are ‘securities’, the issuance and trading must be done through authorized entities. I don’t think this will provide any opportunity to the market, technology companies or crypto companies. This will be a new business for subscribers and existing stock exchanges. IPOs and fundraising will not be easier. Especially, an important step is that the owners of the assets to be ‘tokenize’ must receive approval from the CSRC, literally exactly the same procedures as for Chinese companies listed on foreign stock markets,” Yifan noted.

Separation of Hong Kong: While mainland China maintains a strict ban, Hong Kong continues to implement a separate, cautious pilot program for the issuance of regulated and licensed stablecoins, although this is expected to be done under strict supervision.

Hong Kong is currently implementing a comprehensive multi-tier regulatory framework. structure for digital assets, with several major legislative milestones scheduled for 2026. The government aims to solidify the city’s position as a global digital asset hub by expanding licensing requirements to nearly all types of crypto service providers and aligning tax transparency with international standards.

By 2026, Hong Kong has prioritized the regulation of advisory and over-the-counter (OTC) services:

• New licensing bill: Regulators plan to introduce a bill to the Legislative Council in 2026 to establish licensing regimes for four new categories: virtual asset (VA) trading (including OTC desks), VA custodians, VA advisory services and VA asset management.
• Stablecoin licenses: Following the passage of the Stablecoin Ordinance in 2025, the Hong Kong Monetary Authority (HKMA) is expected to issue the first batch of official stablecoin licenses in the first quarter of 2026.
• Banking standards: Starting January 1, 2026, Hong Kong will fully implement the Basel Committee standards for crypto assets, which govern how banks manage capital requirements and credit risks when dealing with digital assets.
• Tax exemptions: Hong Kong is moving towards high transparency in tax compliance, while maintaining its “no capital gains” competitive environment. The government plans to introduce a bill in 2026 to formally expand tax exemptions for funds and family offices to include “digital assets,” essentially promising a 0% tax rate on crypto profits for these qualified institutional investors.
• CARF Implementation: Legislation to implement the OECD Crypto Asset Reporting Framework (CARF) is scheduled to be completed in 2026.

The United Arab Emirates

As of February 2026, the United Arab Emirates has strengthened its crypto regulatory framework, with the Dubai Financial Services Authority (DFSA) updating its rules on January 12, 2026 to move token suitability assessments from the regulator to authorized companies. The Central Bank of the UAE (CBUAE) also approved a dirham-backed stablecoin for institutional use on February 13, 2026. The new rules aim to increase market flexibility while ensuring high integrity standards for digital asset service providers.

DIFC (DFSA) Updates: As of January 12, 2026, the DFSA removed the list of “Recognized Crypto Tokens,” requiring companies to carry out their own due diligence, evaluation and monitoring of tokens before going public.

Stablecoin Regulation: The CBUAE approved the launch of a Dirham-backed stablecoin (DDSC) on the ADI chain for institutional, payment and settlement use cases starting February 13, 2026. Erhan Kahraman, former editor-in-chief of Cointelegraph Turkey, said:

“I don’t see any major impact on the use of stablecoins in the MENA region, simply because here it is used more as a ‘survival tool’ than as a trading asset. I know that for the Western Hemisphere, stablecoins are the main tool for entry and exit of cryptocurrencies (i.e. USDT is first bought and then used for trading). On the contrary, people in MENA use stablecoins as a gateway to a) cross-border payments/remittances and b) join the global labor market as individuals.”

He continued: “Imagine this: a freelancer needs to provide multiple legal documents, such as a ‘Bank Confirmation Letter’, just to start working for a foreign company (to receive USD or Euros). This is incredibly difficult to provide for the unbanked or unbanked populations found in the MENA region. Stablecoins remove that barrier. When you find a job that pays in USDT, the only thing they ask about your financial situation is your crypto wallet address. I think that’s making a big difference for the unbanked population.”

Inverter protection: Retail customer protection remains strict, with mandatory suitability assessments and the prohibition of certain marketing practices.

Taxation 2026: Income-generating crypto activity is subject to corporate tax, while cryptocurrency transfers are generally exempt from VAT and mining rewards are treated as taxable income.

Compliance and licensing: UAE regulators are largely focused on institutional-level compliance and financial crime prevention, emphasizing strong governance for licensing, according to reports on February 16, 2026.