RAKBank is preparing to enter the United Arab Emirates’ rapidly developing stablecoin landscape after receiving in-principle approval from the Central Bank of the United Arab Emirates (CBUAE) to issue a UAE dirham-backed payment token.
The approval signals that the CBUAE has endorsed the bank’s stablecoin plans in principle, pending the completion of final regulatory and operational requirements. As a bank already licensed and supervised by the central bank, RAKBank must now meet those conditions before proceeding with any live issuance.
Key takeaways
RAKBank has received in-principle approval, not final authorization, to issue a dirham-backed stablecoin.
The token will be fully backed 1:1 by dirhams held in segregated, regulated accounts.
Audited smart contracts and real-time reserve attestations are central to the design.
The move deepens traditional banks’ participation in the UAE’s stablecoin ecosystem.
According to a press release shared on Wednesday, the forthcoming stablecoin will be fully backed one-to-one by dirhams held in segregated, regulated accounts. The token will be governed by audited smart contracts and supported by real-time reserve attestations, aligning with the UAE’s emphasis on transparency and financial stability in digital asset design.
The initiative marks a new phase in RAKBank’s digital assets strategy, building on its 2025 move to allow retail customers to trade cryptocurrencies through a regulated brokerage partner. Raheel Ahmed, group chief executive officer of RAKBank, described the in-principle approval as an “important milestone,” emphasizing that the bank’s approach to digital assets is centered on innovation that is “responsible, regulated, and built on trust.”
UAE’s multi-pillar digital asset framework
RAKBank’s stablecoin plans sit within the UAE’s broader, multi-layered digital asset regime. Oversight is distributed across several authorities, including the CBUAE, Abu Dhabi Global Market, Dubai’s Virtual Assets Regulatory Authority, and other federal and free-zone regulators. Together, these bodies have been shaping rules for stablecoins, virtual asset service providers, and tokenized financial products.
Within this framework, dirham-referenced payment tokens are viewed by policymakers as tools to modernize domestic payments, support digital economy initiatives, and improve the efficiency of cross-border transactions in a remittance-heavy market.
Beyond crypto-native issuers
The UAE’s stablecoin push is no longer confined to crypto-native firms. Telecom operator e& (Etisalat) is piloting a regulated dirham stablecoin under the AE Coin brand for bill payments, while international issuers have also secured regulatory footholds. Circle has obtained approval in Abu Dhabi for USDC, and Ripple has done the same for Ripple USD, targeting institutional use cases and regional expansion.
Ras Al Khaimah itself is positioning as a Web3 and digital economy hub. Through RAK DAO, the emirate has introduced a DARe framework granting decentralized autonomous organizations formal legal status and launched a “Builder’s Oasis” accelerator supported by a $2 million fund for artificial intelligence, gaming, and blockchain startups.
Open questions on infrastructure and adoption
Despite growing regulatory momentum, key questions remain unanswered. RAKBank has yet to disclose which blockchain infrastructure its dirham stablecoin will use, how interoperable it will be with existing global stablecoin rails, or how federal and free-zone rules will interact once banks begin settling real-world flows onchain.
Adoption also remains uncertain. While regulators and institutions are positioning for a tokenized future, widespread use of dirham-backed stablecoins will likely depend on concrete product integrations and clear economic incentives for corporates and consumers to adopt them in everyday payment, treasury, and remittance workflows.
