UAE Dirham Stablecoin Race Heats Up as RAKBank Secures In-Principle Approval

The Central Bank of the United Arab Emirates (CBUAE) has RAKBank in-principle clearance to issue a UAE dirham-backed payment token. This is a large step forward for the country’s stablecoin ecosystem. 

This first approval, on January 7, 2026, means the project must meet all regulatory and operational requirements before it can go online. The development builds on RAKBank’s previous moves into digital assets, such as its 2025 launch of retail cryptocurrency trading through a regulated partner.

Stablecoin Features and Support

The new will be fully backed by dirhams housed in separate, controlled accounts, so you can always get your money back at par value. The token will be controlled by audited smart contracts that provide real-time attestations of the reserve for transparency. 

Raheel Ahmed, the Group CEO of RAKBank, called the approval an “significant milestone” in the bank’s journey with digital assets. He also stressed the bank’s dedication to “innovation that is responsible, regulated, and built on trust.”

Strong Regulatory Framework in the UAE

The UAE has a multi-pillar digital assets system comprising the CBUAE, the Abu Dhabi Global Market, and the Dubai . These groups are responsible for stablecoins, service providers, and tokenised assets. 

Policymakers want dirham-referenced tokens to modernize payments, support the digital economy’s growth, and make it easier for people to send money across borders in this busy market. This structured method assists keep an eye on things while enabling quick on-chain settlements.

Expanding Competitors in the Race

In the UAE’s stablecoin market, traditional players are now in charge alongside crypto natives. Telecom company e& (formerly Etisalat) is testing AE Coin for bill payments, and and Ripple have permission to use and RLUSD in Abu Dhabi, with a focus on institutional growth in the area.

Ras Al Khaimah, where RAKBank is based, is becoming a Web3 hub thanks to RAK DAO’s DARe framework for legal status and a $2 million accelerator for blockchain firms.

significant difficultys to Face

The stablecoin’s choice of blockchain, its capacity to work with global rails, and the need for federal and free-zone legislation to work together for real-world on-chain flows are all still up in the air.

Integrations, incentives, and demand from businesses and consumers for , remittances, and payments are all significant for market adoption. As institutions become ready, real success will depend on how useful they are in practice, not just on how well they follow the rules.