RAKBank is preparing to join the United Arab Emirates’ (UAE’s) fast-evolving stablecoin ecosystem after receiving in-principle approval on Wednesday from the Central Bank of the United Arab Emirates (CBUAE) to issue a UAE dirham-backed payment token.
In-principle approval means the CBUAE has agreed to RAKBank’s stablecoin plans subject to final regulatory and operational conditions, and the bank, already licensed and supervised by the CBUAE, must satisfy those before any live issuance.
In a Wednesday press release shared with Cointelegraph, the bank said the forthcoming stablecoin will be fully backed 1:1 by dirhams held in segregated, regulated accounts and governed by audited smart contracts with real-time reserve attestations.
The stablecoin push marks a new phase in RAKBank’s digital assets strategy, building on its 2025 move to let retail customers trade cryptocurrencies through a regulated brokerage partner.
Raheel Ahmed, group CEO of RAKBank, said that the in-principle approval from the CBUAE was an “important milestone” in the bank’s digital assets journey, and that it reflected RAKBank’s focus on “innovation that is responsible, regulated, and built on trust.”
UAE’s multi-pillar digital asset regime
The UAE has built out a multi-pillar digital assets framework, with the CBUAE, the Abu Dhabi Global Market, Dubai’s Virtual Assets Regulatory Authority and other agencies carving out rules for stablecoins, virtual asset service providers and tokenized financial products.
Within that landscape, dirham-referenced payment tokens are intended by policymakers to modernize domestic payments, support digital economy initiatives and improve the efficiency of cross-border flows in a remittance-heavy market.
Related: Why crypto millionaires are moving to the UAE (these 5 reasons explain everything)
Beyond crypto-natives: UAE’s stablecoin map
The UAE’s stablecoin race is no longer limited to crypto-native firms and international issuers.
Telecom giant e& (Etisalat) is piloting a regulated dirham stablecoin for bill payments under the AE Coin brand, while global players like Circle and Ripple have secured approvals in Abu Dhabi for $USDC ($USDC) and Ripple USD (RLUSD), respectively, targeting institutional use cases and regional expansion.
National Bank of RAK. Source: RAKBank
Ras Al Khaimah itself, home to RAKBank, is busily trying to position itself as a specialist Web3 and digital economy hub through RAK DAO, which has introduced a DARe framework to give DAOs formal legal status and launched a “Builder’s Oasis” accelerator backed by a $2 million fund for AI, gaming and blockchain startups.
Related: UAE to introduce legal framework for DAOs
Open questions on rails and adoption
Still, the news raises several questions. It is not yet clear which blockchain infrastructure the token will use, how interoperable it will be with existing global stablecoin rails or how UAE federal and free-zone rules will interact once banks begin settling real-world flows onchain.
Perhaps most importantly, market adoption remains an open issue. While regulators and institutions are positioning for a tokenized future, it will take concrete product integrations and pricing incentives for corporates and consumers to use dirham stablecoins in everyday treasury, remittance and payment workflows.
Cointelegraph reached out to RAKBank for comments but had not received a response by publication time.
