Today's Edition
A. SREENIVASA REDDY (ABU DHABI)
RAKBANK has received in-principle approval from the Central Bank of the UAE (CBUAE) to issue a dirham-backed payment token, marking a key step in the bank’s expansion into regulated digital assets.
RAKBANK said in a statement that the stablecoin will be fully backed by UAE dirhams held in segregated accounts, with audited smart contracts and real-time reserve attestations to support transparency and full redemption at par value.
The proposed token will be a fiat currency-backed stablecoin — a type of digital asset designed to maintain a stable value by being fully backed by a traditional currency, in this case the UAE dirham. Such stablecoins function as digital representations of fiat money and are typically redeemable on a one-to-one basis.
“The move is an important step in RAKBANK’s digital assets journey and reflects the Bank’s commitment to developing regulated, secure and transparent financial solutions aligned with the UAE’s evolving digital economy framework,” the bank said in a statement.
RAKBANK said the stablecoin aims to combine the confidence of traditional banking with the efficiency of blockchain technology.
Raheel Ahmed, Group Chief Executive Officer of RAKBANK, said the approval represents a significant milestone. “Receiving in-principle approval from the Central Bank of the UAE is an important milestone in our digital assets journey. It reflects our focus on innovation that is responsible, regulated and built on trust. As we mark our 50th anniversary, we remain committed to developing solutions that are designed around our customers’ needs and aligned with the UAE’s vision for a future-ready financial system,” he said.
The development builds on RAKBANK’s growing digital asset capabilities. The bank has already launched a crypto brokerage service through its mobile banking app, allowing retail customers to buy, sell and swap cryptocurrencies directly from their dirham accounts. RAKBANK was the first conventional bank in the UAE to offer crypto trading services, following a partnership with Austrian fintech firm Bitpanda.
The move comes amid broader momentum around digital currencies and stablecoins in the UAE. The Central Bank of the UAE is itself in advanced stages of launching a national digital currency as part of its monetary and payments modernisation programme.
The UAE already hosts a functioning dirham-backed stablecoin, AE Coin, launched by Al Maryah Community Bank, which has been adopted by several merchants including ADNOC Distribution and Air Arabia. Payments company Network International has also agreed to enable AE Coin acceptance across its point-of-sale and e-commerce platforms.
Separately, ADQ, IHC and First Abu Dhabi Bank have announced plans to launch a new dirham-backed stablecoin, subject to regulatory approval.
Abu Dhabi Global Market has also emerged as a hub for digital assets, hosting global stablecoin issuers such as Tether and Circle, which operate US dollar-backed stablecoins under its regulatory framework.
