RAKBank has secured in-principle approval from the Central Bank of the UAE to issue a dirham-backed stablecoin, positioning the lender among the first domestic banks to move toward regulated payment tokens in the country.
UAE Regulator Approves AED-Backed Stablecoin
RAKBank said the Central Bank has granted in principle consent for an AED-backed stablecoin to be issued as a fully collateralised payment token. The bank must still complete additional licensing, operational setup, and compliance steps before the token can go live in a pilot phase.
The proposed stablecoin plans to maintain one-to-one backing with UAE dirhams held in segregated, regulated accounts, enabling full redemption at par value. RAKBank added that audited smart contracts and real-time reserve attestations will underpin the structure, giving supervisors and users continuous visibility into backing levels.
How the Stablecoin Fits UAE Rules
The Central Bank’s Payment Token Services regulation, published in 2024, permits the use of dirham-backed stablecoins for payments while excluding unbacked crypto assets and foreign currency stablecoins such as USDT from that role in the domestic market.
Under the framework, issuers must publish a white paper and obtain explicit approval before launching any payment token.
The regulation generally prevents banks from directly acting as payment token issuers but allows them to operate through licensed subsidiaries or related entities if those meet all prudential and conduct requirements. RAKBank has not yet disclosed the final issuance vehicle, but framed the move as part of its broader digital assets strategy.
RAKBank’s Digital Asset Push and Market Context
Group chief executive Raheel Ahmed called the approval a key milestone in the bank’s digital assets journey and tied it to the UAE’s drive for a regulated, future-ready financial system. In 2025, RAKBank enabled retail customers to trade cryptocurrencies via a partnership with the regulated brokerage Bitpanda, available through its mobile app.
The new project follows other dirham stablecoin initiatives in the Emirates, including Zand AED, approved in November 2025 as the first regulated multi-chain UAE dirham-backed stablecoin on public blockchains.
Abu Dhabi groups IHC, ADQ, and First Abu Dhabi Bank also announced plans for a dirham-backed token, while Tether and Circle have advanced UAE projects under local oversight, underscoring growing institutional interest in AED-denominated digital money.
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