RAKBANK gets in-principle approval for UAE Dirham stablecoin

RAKBANK has received in-principle approval from the Central Bank of the UAE to issue an AED-backed payment token, marking a significant milestone in the bank’s expansion into regulated digital assets. 

The approval is conditional and subject to the completion of regulatory, technical, and operational requirements, according to the bank’s announcement.

The proposed stablecoin would be pegged 1:1 to the UAE dirham and is intended to function as a regulated payment token rather than a speculative crypto asset. 

RAKBANK said the token will be fully backed by AED reserves held in segregated and regulated accounts, enabling holders to redeem the stablecoin at par value. The bank also plans to deploy audited smart contracts with real-time reserve attestations to ensure transparency and operational integrity.

This move builds on RAKBANK’s earlier steps into digital assets. In 2025, the bank enabled retail customers to trade cryptocurrencies through a regulated brokerage partner, offering a compliant entry point into crypto markets. 

The stablecoin initiative extends that strategy by combining traditional banking safeguards with blockchain-based efficiency.

According to RAKBANK, the payment token is designed to support faster and more efficient transactions while maintaining the trust associated with the conventional banking system. 

While the bank has not yet disclosed specific use cases, industry observers expect potential applications in domestic payments, remittances, and future tokenized financial services within the UAE’s regulated framework.

Raheel Ahmed, Group CEO of RAKBANK, described the approval as a key step in the bank’s long-term digital assets strategy. He said the development reflects a focus on innovation that is “responsible, regulated and built on trust,” and aligns with the UAE’s broader vision for a future-ready financial system. 

Ahmed added that the initiative comes as the bank marks its 50th anniversary, underscoring its intent to balance digital innovation with customer-centric banking.

RAKBANK noted that further details on the pilot phase, launch timeline, and potential expansion of the stablecoin will be announced in due course, subject to final regulatory approvals.