The National Bank of Ras Al Khaimah (RAKBANK) has received in-principle approval from the Central Bank of the United Arab Emirates (CBUAE) to issue a UAE dirham-backed stablecoin, marking a significant step in the country's regulated digital asset push. The approval, granted on January 7, 2026, is conditional, meaning RAKBANK must satisfy final regulatory and operational requirements before any live issuance can commence.
The forthcoming stablecoin will be fully backed 1:1 by dirhams held in segregated, regulated accounts and will be governed by audited smart contracts providing real-time reserve attestations. This initiative represents a new phase in RAKBANK's digital assets strategy, following its 2025 move to allow retail customers to trade cryptocurrencies through a regulated partner.
Raheel Ahmed, Group CEO of RAKBANK, called the approval an "important milestone" reflecting the bank's focus on "innovation that is responsible, regulated, and built on trust." The development occurs within the UAE's multi-pillar digital assets framework, involving regulators like the CBUAE, Abu Dhabi Global Market, and Dubai's Virtual Assets Regulatory Authority (VARA). Policymakers intend dirham-referenced payment tokens to modernize domestic payments, support the digital economy, and improve cross-border flow efficiency in a remittance-heavy market.
The UAE's stablecoin landscape is expanding beyond crypto-native firms. Telecom giant e& (Etisalat) is piloting a regulated dirham stablecoin for bill payments (AE Coin), while global players Circle and Ripple have secured approvals in Abu Dhabi for USDC and Ripple USD (RLUSD), respectively, targeting institutional use. Meanwhile, Ras Al Khaimah is positioning itself as a Web3 hub through RAK DAO, which has introduced a legal framework for DAOs and launched a $2 million accelerator fund.
Despite the progress, key questions remain unanswered, including which blockchain infrastructure will be used, how interoperable the token will be with global stablecoin rails, and how federal and free-zone rules will interact. Perhaps most crucially, market adoption is an open issue, requiring concrete product integrations and incentives for corporates and consumers to use dirham stablecoins in treasury, remittance, and payment workflows.
