RAKBank’s Stablecoin Initiative
RAKBank has recently received an initial go-ahead from the Central Bank of the United Arab Emirates (CBUAE) to create a stablecoin linked to the UAE dirham. This development is a vital move in the nation’s efforts to establish a regulated digital currency framework.
While the approval is not a complete license, it signifies that RAKBank can proceed with its plans for a fully collateralized AED stablecoin, pending the fulfillment of additional regulatory and operational criteria. In its official communication, RAKBank confirmed that the new stablecoin will be 100% backed by dirhams held in separate, regulated accounts, ensuring that every token can be redeemed at its nominal value. These reserves will undergo regular audits to assure transparency, with the token’s architecture relying on audited smart contracts and real-time verifications of reserves.
Leadership Insights
Raheel Ahmed, the Group CEO of RAKBank, characterized this approval as a significant achievement in the bank’s ambition to innovate within the digital assets sector. He emphasized the bank’s commitment to responsible advancements in the context of the UAE’s evolving financial landscape. RAKBank has previously ventured into the digital asset sphere by enabling customers to trade cryptocurrencies through a regulated brokerage since 2025.
UAE’s Stablecoin Ecosystem
The announcement comes as the UAE actively fosters a diverse stablecoin ecosystem, following the implementation of the Payment Token Services Regulation in 2024. This regulation established the framework for licensed payment token issuers and barred unauthorized stablecoins from being used in commerce.
In the competitive landscape of regulated digital currencies, RAKBank joins players such as Zand, which achieved authorization in late 2025 as the UAE’s pioneer multi-chain AED-backed stablecoin designed for swift transactions and international transfers, leveraging blockchain technology alongside regulated reserves.
Another strong contender, AE Coin, received final approval earlier and is recognized as a fully licensed payment token according to the central bank’s regulations, with stringent measures outlined in its white paper to maintain appropriate reserve backing, governance, and audits, ensuring reliability and compliance.
Global Interest and Future Outlook
Additionally, global companies are taking interest in the UAE market; in December 2025, the US company Circle obtained permission to operate in Abu Dhabi, aiming to enhance the role of stablecoin payments and settlements. The UAE’s authorities regard regulated stablecoins as instrumental in updating payment systems, improving remittance flows, and bolstering the digital economy.
Plans are in place to integrate these digital solutions into the financial infrastructure while imposing rigorous oversight to safeguard consumers and deter misuse. As RAKBank moves toward acquiring full regulatory approval, market analysts anticipate ongoing competition in the stablecoin sector, influenced by both local and international entities seeking to redefine the role of digital currencies in the UAE’s financial ecosystem.
