The rules for digital assets still change from one market to the next, and that patchwork decides where banks, exchanges and institutions choose to build. The UAE has become a major destination, while stablecoins and tokenization push regulators to move faster. Meera Judge, Global Head of Policy and Regulatory Affairs at Elliptic and Co-chair of the Digital Assets Working Group at the MENA Fintech Association, explains where regulation is lining up and why the UAE stands out. She also covers what holds traditional institutions back, how blockchain analytics fights financial crime, and why AI is the next regulatory frontier.
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Digital asset regulation still varies across major markets. Are we getting closer to a globally consistent framework?
In the UAE we are far ahead of many other regulators, and we have five major regulators within the UAE itself. One area where we are seeing consistency is stablecoins, across the EU, the UK and the US, where the GENIUS Act goes into effect in January 2027. It is where we are seeing the ability for an issuer to freeze stablecoins in the event of a hack, and we saw that most recently with a major exchange hack in the last ten days. The ability to freeze and burn is something we will see implemented across the board, and the UAE is at the forefront of that, at the central bank level as well as at the securities regulator level.
The UAE has become a major destination for digital asset businesses. What is the region doing differently?
I think it is the competitive nature of how the regulators work. We have specific digital asset regulators like VARA in Dubai, and innovative regulators like the FSRA in Abu Dhabi, which can adapt their framework for traditional assets as well as digital assets. They take traditional models for the securities and commodity sectors, and they reuse the market infrastructure regulations for recognised investment exchanges and clearing houses and fit them to digital assets. This competitive landscape is bringing a lot of people to the region, while other regulators around the world keep their barriers very high. People want to come here to have regulation applied in a common sense way by people who understand the market.
Traditional financial institutions are increasingly interested in digital assets. What is still holding them back?
Visibility and defensibility. One of the questions we get a lot at Elliptic is how to maintain confidence in the sector. There have been a few hacks and some volatility in the market. That is where Elliptic comes in. You can trace every single transaction on the blockchain, which gives banks with a more risk averse appetite the ability to enter a digital asset transaction knowing they can still meet the compliance requirements that apply to them.
How effective are blockchain analytics tools at identifying money laundering and other financial crime?
Highly effective. In the latest exchange hack, which was the biggest in history, within minutes we were able to trace the funds across 11 different blockchains, because money launderers hop across chains. We were able to link it to North Korea's Lazarus group, and then the FBI came in and confirmed it. We have done that in many cases. It is the ability to look across chains and trace the funds.
Can regulators encourage innovation while still protecting investors, or does stronger oversight inevitably come with trade offs?
Let's be realistic, digital assets will always move faster than regulation. However, very good regulators take what they already have from a governance perspective and reuse it. We already have a three lines of defence model that follows the traditional finance model, and the ability to implement that is already in place. What matters is having the foresight to be innovative with DeFi products and tokenised assets, and to bend and adapt the rules accordingly. You do not need to recreate the wheel, and if you try to, you will fall far behind the rest of the market.
What will be the biggest regulatory development shaping digital asset markets in the MENA region over the next few years?
AI is the biggest one we are seeing, in particular what we call the agentic economy, where AI is used to make payments and to issue transactions on, say, a crypto exchange. There has not yet been global harmonisation on standards for using AI responsibly. We are very passionate about this at Elliptic, and we have released something called The Standard, which is eight principles based on the foundation of the Monetary Authority of Singapore and the FSB principles, setting out what to consider and embed within your vendor systems to use AI in the best way. So look out for AI regulation, and I know from an inside bird that there is more coming in the UAE soon.