RAKBank Wins UAE Approval to Advance Dirham-Backed Stablecoin Plans

RAKBank is one step closer to launching a stablecoin pegged to the Dirham currency, thanks to the in-principle approval from the Central Bank of the United Arab Emirates. This approval also makes possible the continued advancement of the “green” payment token linked directly to the UAE dirham as the money system of the future, on the heels of the continued development of the regulated digital payment system in the UAE.

RAKBank Expands Digital Payments Strategy

This approval confirms that the central bank has examined the proposal from RAKBank and accepted it in principle. RAKBank still needs to undergo the final examination process before the stablecoin can be made available in the market.

As RAKBank is already under the supervision of the Central Bank of the United Arab Emirates (CBUAE), the procedure may speed up compared with new players in the market. However, supervision will still be strict.

The bank announced that the token to be issued would be pegged on a direct, one-to-one basis with the UAE dirham. The funds would be kept in separate accounts and would be governed by existing banking regulations. The smart contracts would be audited to ensure that every token in existence corresponded to money within the banking system.

It is also set to offer the user confidence as it relies on the stablecoin for payment services. The stablecoin project is part of RAKBank’s digital forays. In 2025, RAKBank permitted retail customers to purchase and sell digital currencies via an authorized brokerage firm.

In contrast to previous schemes, which were investment-focused, this one has a payments/settlement theme. The approval has been hailed by the banking leaders as a significant move towards incorporating innovation within the banking system without undermining trust.

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RAKBank Stablecoin Enters UAE Payments Market

The token issued by RAKBank will participate in a rapidly developing market of stablecoins in the UAE, determined by a tiered system of regulations. Payment tokens are regulated by the central bank, while other virtual asset activities are regulated by Abu Dhabi Global Market and Dubai’s Virtual Assets Regulatory Authority.

Such an infrastructure has contributed to luring local as well as international players to these markets. Ripple’s stablecoin, named RLUSD, was launched in the Dubai International Financial Centre in June 2025.

It is anticipated that dirham-backed stablecoins will enable payments, government transfers, as well as cross-border transactions. This is particularly important for the UAE, as it has a considerable number of remittance transactions, which need to be handled quickly and effectively.

Telecoms and major cryptocurrency companies have received approval in this sector, promoting competition.

While this is a positive development, some aspects of this approval are not yet public knowledge. RAKBank has not indicated which blockchain it would be using for its stablecoin, nor how it would be integrating this new means of payment with its extant infrastructure.

Success depends on fees, usability, and value creation for both businesses and individuals. The ultimate measure of success is not approval but the use of the token in day-to-day transaction activities.

This comes in the wake of increasing adoption of stablecoins globally. Visa also enabled USDC settlements on Arc in the US through Circle, which shows that traditional payment leaders support blockchain payments.

However, with the growing number of banks entering the sector, regulated stablecoins are transforming from being a concept to becoming a financial instrument in the financial sector.

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