RAKBank secured in-principle approval from the Central Bank of the UAE (CBUAE) on Wednesday to issue a dirham-pegged stablecoin, marking a significant step in the country’s race to build a regulated digital currency ecosystem. The approval, while not a final license, clears the way for the bank to launch a fully backed AED token once it meets remaining regulatory and operational requirements.
In its announcement, RAKBank said the planned stablecoin would be backed 1:1 by UAE dirham reserves held in segregated, regulated accounts. These reserves must support full redemption at par value and be audited regularly to ensure transparency. The bank also noted that audited smart contracts and real-time reserve attestations will underpin the token’s design.
Raheel Ahmed, Group CEO of RAKBank, described the approval as an “important milestone” in the bank’s digital asset strategy. He highlighted the institution’s focus on responsible innovation within the UAE’s evolving financial framework. RAKBank previously expanded its digital offerings in 2025 by enabling retail crypto trading through a regulated brokerage partner.
Competitive Landscape Broadens with Multiple AED Tokens
The RAKBank announcement comes as the UAE continues to cultivate a broad stablecoin landscape under the Payment Token Services Regulation introduced in 2024. That regulation laid out conditions for licensed issuers of payment tokens while prohibiting unlicensed stablecoins from mainstream use in goods and services.
RAKBank will enter a field that already includes Zand AED, approved in late 2025 as the country’s first regulated, multi-chain dirham-backed stablecoin on public blockchains. Zand’s token is designed for fast settlement and cross-border use, combining blockchain infrastructure with regulated reserve backing.
Another contender, AE Coin, gained final regulatory approval earlier and has been positioned as a fully licensed payment token under the central bank’s framework. Its white paper outlines strict controls on reserve backing, audits, and governance to uphold financial stability and compliance.
International players are also engaging. In December 2025, US firm Circle secured a financial services permission in Abu Dhabi to support expanded stablecoin payment and settlement use cases, reflecting growing global participation in the UAE market.
Regulatory Push Ties Stablecoins to Broader Digital Economy Goals
UAE authorities view regulated stablecoins as tools to modernize payments, enhance remittances, and support the digital economy. Officials have outlined plans to integrate digital tokens into financial infrastructure while maintaining strong oversight to protect consumers and prevent misuse.
As RAKBank works toward full approval, analysts say the stablecoin space will remain competitive, with both domestic and international firms shaping how digital currencies fit into the Emirates’ broader financial system.
