RAKBank Receives Approval for Dirham-Backed Stablecoin Development

RAKBank has received in-principle approval from the Central Bank of the United Arab Emirates (UAE) to develop a stablecoin backed by UAE dirhams. This approval allows the bank to proceed with plans for a regulated payment token as part of the UAE's expanding digital payment system.

Key Points of RAKBank Stablecoin Approval

The Central Bank of the UAE has conditionally accepted RAKBank's proposal, pending further regulatory checks.
RAKBank's token will be fully backed one-to-one by UAE dirhams, held in segregated accounts and verified through audited smart contracts.
This initiative aligns with RAKBank's broader digital strategy, following their 2025 move to allow cryptocurrency trading for retail customers via a regulated partner.
The focus of the stablecoin is on payment use rather than trading.
Stablecoins are gaining traction in the UAE, with other regions like Malaysia also advancing similar initiatives.

Market Context in the UAE

RAKBank’s stablecoin joins other payment token initiatives under the UAE's multi-layer regulatory framework.
The central bank regulates payment tokens, while other digital assets are overseen by Abu Dhabi Global Market and Dubai Virtual Assets Regulatory Authority.
Ripple’s stablecoin RLUSD is already operational in the UAE, illustrating the growing adoption of stablecoins.
The UAE's significant remittance flows make efficient payment solutions crucial.
Details on the blockchain network for RAKBank's token and its integration with existing systems remain undisclosed.

Adoption of the RAKBank stablecoin will rely on factors like pricing, ease of use, and demand. Its impact will be measured by actual usage rather than just regulatory approval.

In a related development, Visa has launched stablecoin settlements in the US using Circle’s USDC on the Arc blockchain.