RAKBank is set to enter the United Arab Emirates’ rapidly expanding stablecoin market after receiving in-principle approval on Wednesday from the Central Bank of the UAE (CBUAE) to issue a dirham-backed payment token.
The in-principle approval signals regulatory support for RAKBank’s plans, subject to the bank meeting final operational and compliance requirements before launch. RAKBank, which is already licensed and supervised by the CBUAE, must satisfy those conditions prior to any live issuance.
In a Wednesday press release shared with Cointelegraph, the bank said the proposed stablecoin will be fully backed on a one-to-one basis by UAE dirhams held in segregated, regulated accounts. It will be governed by audited smart contracts and feature real-time reserve attestations.
The move marks a new phase in RAKBank’s digital asset strategy, following its 2025 decision to allow retail customers to trade cryptocurrencies through a regulated brokerage partner.
RAKBank Group CEO Raheel Ahmed described the approval as an “important milestone” in the bank’s digital assets journey, saying it reflects a commitment to “innovation that is responsible, regulated, and built on trust.”
UAE’s multi-pillar digital asset framework
The UAE has developed a multi-pillar regulatory regime for digital assets, with oversight shared among the CBUAE, Abu Dhabi Global Market, Dubai’s Virtual Assets Regulatory Authority, and other authorities overseeing stablecoins, virtual asset service providers, and tokenized financial products.
Within this framework, dirham-referenced payment tokens are intended to modernize domestic payments, support digital economy initiatives, and improve the efficiency of cross-border transactions in a remittance-heavy market.
Beyond crypto natives: UAE’s stablecoin landscape expands
The UAE’s stablecoin race is no longer confined to crypto-native firms and international issuers.
Telecoms giant e& (Etisalat) is piloting a regulated dirham-backed stablecoin under the AE Coin brand for bill payments, while global players such as Circle and Ripple have secured approvals in Abu Dhabi for USDC and Ripple USD, respectively, focusing on institutional use cases and regional expansion.
Ras Al Khaimah, home to RAKBank, is also positioning itself as a specialized Web3 and digital economy hub through RAK DAO. The initiative has introduced the DARe framework to grant decentralized autonomous organizations formal legal status and launched the “Builder’s Oasis” accelerator, supported by a $2 million fund for AI, gaming, and blockchain startups.
Open questions around infrastructure and adoption
Despite the momentum, several uncertainties remain. It is still unclear which blockchain infrastructure the token will run on, how interoperable it will be with existing global stablecoin rails, or how UAE federal and free-zone regulations will interact once banks begin settling real-world transactions on-chain.
Market adoption is another key unknown. While regulators and institutions are preparing for a tokenized future, widespread use of dirham-backed stablecoins will likely depend on practical product integrations and clear pricing incentives that encourage corporates and consumers to adopt them for everyday treasury management, remittances, and payment use cases.
