- RAKBank has obtained in-principle approval from the UAE Central Bank for the issuance of a fully collateralized stablecoin pegged to the dirham.
- This step places RAKBank among many regulated entities that are entering the UAE’s rapidly developing stablecoin scene.
RAKBank is all set to enter the rising stablecoin market in the UAE. The Central Bank of the UAE has given it an in-principle approval to issue the stablecoin, which will be pegged to the Dirham. This marks the alignment of the Central Bank of the UAE with the model that the bank has designed for issuing the stablecoin. This approval stands subject to certain requirements.
In-principle approval means they have agreed to the concept as well as the structure of the token, but are holding back on final approval until all standards are met. Being an already licensed bank under CBUAE, RAKBank can only go forward with steps before the general public issuance.
In a press release, it was revealed that the new stablecoin will be fully collateralized on a one-to-one basis by UAE dirhams placed in regulated accounts. According to the bank, its stablecoin will run on audited smart contracts with real-time proofs of reserves, as set out by stablecoin regulations in the UAE.
The project marks another step in the continuation of the digital assets strategy initiated by RAKBank when it began allowing retail trading of cryptocurrency in 2025 via a regulated broker. The stablecoin project further develops that strategy into a tokenized payments platform.
Stablecoins Within the Multi-Regulatory Framework of the UAE
Against this background, the UAE has developed a multistandard regime by the CBUAE, Abu Dhabi Global Market, Dubai’s Virtual Assets Regulatory Authority, and other bodies at the federal and free-zone levels for these kinds of instruments. Collectively, stablecoins, virtual asset service providers, and tokenized financial products have thus come under the purview of these different regulatory regimes.
Dirham-referenced payment tokens are aimed at promoting modernization in domestic payments, developing efficiency in cross-border settlement, and eventually contributing to the attainment of digital economy goals within the UAE. The segment of stablecoins has been gaining increasing interest from both domestic institutions and international issuers.
Meanwhile, Etisalat, the regional telecommunications provider, is testing a licensed dirham stablecoin in the guise of AE Coin for use in bill payments; at the same time, there has been a set of approvals for global companies: Circle, Ripple, and updated its approval in Abu Dhabi for USDC and RLUSD, targeting institutional settlement and regional expansion.
Outlook And Factors To Consider
As the momentum among regulators grows, there are still many unknowns regarding blockchain infrastructure, stablecoin interlinking, as well as how federal versus free-zone regulations are likely to interact when banks start processing real-world transactions on the blockchain. It seems likely that any mainstream acceptance within the markets could well involve integration with existing processing systems.
The in-principle approval from RAKBank represents the next phase of the UAE’s efforts to ensure a regulated and bank-backed stablecoin. The success of dirham-backed stablecoin solutions will largely rely on the regulation provided and the integration of the stablecoin solutions.
Highlighted Crypto News:
Barclays makes first stablecoin bet with investment in Ubyx