RAKBank Receives Initial Approval for Dirham-Based Stablecoin
RAKBank Enters the Stablecoin Race in the UAE
RAKBank is preparing to enter the rapidly evolving stablecoin ecosystem in the United Arab Emirates (UAE) after receiving initial approval from the Central Bank of the UAE (CBUAE) on January 7 to issue a payment token backed by the Emirati dirham. This initial approval means that the CBUAE has accepted RAKBank's stablecoin plans, contingent upon compliance with final regulations and operational conditions. Already licensed and supervised by the CBUAE, RAKBank must meet these requirements before actual issuance can commence.
In a press release issued on Wednesday, RAKBank noted that the future stablecoin will be fully backed 1:1 by dirhams held in regulated, segregated accounts, governed by audited smart contracts, featuring real-time reserve attestations. This initiative marks a new phase in the bank's digital asset strategy, reinforcing its decision made in 2025 to allow clients to trade cryptocurrencies through a regulated brokerage partner.
Raheel Ahmed, CEO of RAKBank Group, stated that the initial approval from the CBUAE represents a "significant milestone" in the bank's digital asset journey, underscoring the bank's focus on "responsible innovation, regulation, and trust-building."
A Robust Digital Framework for Digital Assets in the UAE
The UAE has developed a robust digital framework for digital assets, with the CBUAE, Abu Dhabi Global Market, Dubai's Virtual Assets Regulatory Authority, and other agencies establishing regulations for stablecoins, virtual asset service providers, and tokenized financial products. In this context, dirham-backed payment tokens aim to modernize domestic payments, support digital economy initiatives, and enhance the efficiency of cross-border flows in a market rich with remittances.
Furthermore, the race for stablecoins in the UAE is no longer limited to cryptocurrency firms, with telecom giant e& (Etisalat) testing a regulated stablecoin for payments, and international companies like Circle and Ripple having received approvals in Abu Dhabi for USDC and Ripple USD, targeting institutional uses and regional expansion.
Nonetheless, several questions remain unanswered, such as the blockchain infrastructure that the token will use, its interoperability with existing global stablecoin infrastructures, and how federal regulations will interact with free zone regulations once banks start processing real flows on the blockchain. Additionally, market adoption remains an open issue, requiring concrete integration of products and price incentives to encourage the use of dirham stablecoins for treasury, remittances, and everyday payments.
