RAKBank has received in-principle authorization from the Central Bank of the UAE (CBUAE) to issue a stablecoin pegged to the UAE dirham, marking a significant milestone in the country’s regulated digital payments landscape. The approval allows the bank to proceed with a dirham-backed payment token, subject to the completion of final operational and regulatory requirements.
The stablecoin will be fully backed by the dirham on a 1:1 basis, with reserves held in controlled and segregated accounts. Its operations will rely on smart contracts supported by real-time attestation, ensuring transparency, auditability, and trust. RAKBank already operates under full CBUAE supervision, positioning it to move quickly once final conditions are met.
The move reflects RAKBank’s broader digital strategy. In 2025, the bank enabled retail crypto trading through regulated brokerage partners, signaling an early embrace of digital assets within a compliance-led framework. Group CEO Raheel Ahmed described the approval as a major milestone, underscoring the bank’s commitment to responsible innovation and trust-based financial solutions.
RAKBank’s entry adds momentum to a rapidly evolving UAE stablecoin ecosystem. Telecom group e& is piloting AE Coin for bill payments, Circle has received approval to operate USDC-related services, Ripple has secured clearance for Ripple USD, and Zand Bank launched Zand AED in late 2025. Together, these initiatives highlight growing institutional interest in tokenized payments.
The regulatory environment is shaped by multiple authorities, with the CBUAE overseeing payment tokens, while Abu Dhabi Global Market and Dubai’s VARA provide complementary frameworks. Ras Al Khaimah is also positioning itself as a Web3 hub through initiatives such as the RAK DAO framework and the Oasis accelerator.
Despite the progress, questions remain around the underlying blockchain infrastructure, interoperability with global stablecoin networks, and real-world adoption. As institutions explore tokenized finance, the success of dirham-backed stablecoins will depend on practical integrations and widespread market usage.
