RAKBank Advances Stablecoin Plans with UAE Central Bank Approval

According to Cointelegraph, RAKBank is set to enter the United Arab Emirates' rapidly developing stablecoin ecosystem following in-principle approval from the Central Bank of the United Arab Emirates (CBUAE) on January 7. This approval allows RAKBank to issue a payment token backed by the UAE dirham, contingent upon meeting final regulatory and operational requirements. The bank, already licensed and supervised by the CBUAE, must fulfill these conditions before the stablecoin can be officially launched. RAKBank announced in a press release that the upcoming stablecoin will be fully backed 1:1 by dirhams held in segregated, regulated accounts. It will be governed by audited smart contracts with real-time reserve attestations. This initiative marks a significant step in RAKBank's digital assets strategy, following its 2025 move to enable retail customers to trade cryptocurrencies through a regulated brokerage partner. Raheel Ahmed, Group CEO of RAKBank, emphasized that the approval from the CBUAE is a crucial milestone in the bank's digital assets journey, highlighting the bank's commitment to responsible, regulated innovation built on trust. The UAE has established a comprehensive digital assets framework, involving the CBUAE, Abu Dhabi Global Market, Dubai's Virtual Assets Regulatory Authority, and other agencies. These entities have developed regulations for stablecoins, virtual asset service providers, and tokenized financial products. Within this framework, dirham-referenced payment tokens are designed to modernize domestic payments, support digital economy initiatives, and enhance the efficiency of cross-border transactions in a remittance-heavy market. The UAE's stablecoin landscape is expanding beyond crypto-native firms and international issuers. Telecom giant e& (Etisalat) is testing a regulated dirham stablecoin for bill payments under the AE Coin brand. Meanwhile, global companies like Circle and Ripple have obtained approvals in Abu Dhabi for USDC and Ripple USD, respectively, aiming at institutional use cases and regional growth. Ras Al Khaimah, home to RAKBank, is actively positioning itself as a hub for Web3 and digital economy through RAK DAO, which has introduced a DARe framework to provide DAOs with formal legal status and launched a "Builder's Oasis" accelerator supported by a $2 million fund for AI, gaming, and blockchain startups. Despite these developments, several questions remain unanswered. The blockchain infrastructure for the token is yet to be determined, as is its interoperability with existing global stablecoin systems. Additionally, the interaction between UAE federal and free-zone regulations once banks start settling real-world transactions onchain is unclear. Market adoption is another open issue, as regulators and institutions prepare for a tokenized future. Concrete product integrations and pricing incentives will be necessary for corporates and consumers to incorporate dirham stablecoins into everyday treasury, remittance, and payment processes. Cointelegraph reached out to RAKBank for comments but had not received a response by publication time.