The law modernizes and unifies the financial supervisory framework by placing banks, insurers, reinsurers, fintechs, and virtual assets under a single regulatory regime for the first time.

More power for the lender of last resort 

Mohamed Damak, Managing Director at S&P Global Dubai, said in a media release: «This decree replaces Federal Law Decree No. 14 of 2018 on the central bank and the organization of financial institutions and activities—including its amendments—as well as Federal Law Decree No. 48 of 2023, which regulates insurance activities.»

The Central Bank of the UAE (CBUAE) gains expanded powers for the orderly resolution of financial institutions. It can now appoint resolution administrators, establish temporary bridge institutions, and transfer non-performing loans. Bail-in instruments to recapitalise systemically important institutions are planned, but details on their practical implementation remain to be seen.

Focus on digital wallets

Moreover, the law strengthens consumer protection and the regulation of digital financial services. Mobile wallets (e-wallets), payment portals, and fintech companies now fall under the supervision of the central bank, which sets minimum standards for cybersecurity, data protection, and operational stability. Violations may incur severe penalties.

For Islamic banks, the law introduces an important exemption: they and their clients are no longer required to register assets related to sukuk issuances. However, this change creates uncertainty regarding the collateralisation of Islamic «bonds» in case of defaults.

Petrodollars in case of need

Overall, Damak from S&P expects the law to significantly improve transparency and enforcement of supervision without negatively affecting the insurance sector’s rating or the UAE’s country risk. Damak said: «Currently, we continue to assume that the UAE authorities remain strongly supportive of the local banking system.» Except for the publicly listed Mashreq Bank in Dubai, the government holds stakes in the other 22 local financial institutions in the UAE.

S&P’s sovereign credit rating for the UAE is «AA» with a stable outlook, the second-highest rating level on the agency’s scale. This rating, last affirmed in June 2025, reflects the UAE’s solid fiscal position, economic resilience, and consistent financial management—both as a global oil supplier and as the most diversified economy in the Gulf Arab region.