Key Takeaways
- RAKBANK gains CBUAE in-principle approval to issue a fully AED-backed stablecoin for payments.
- Approval advances UAE’s private-sector digital finance amid rising regulated stablecoins.
- The digital Dirham CBDC rollout has been delayed, creating space for banks like RAKBANK to innovate.
As the UAE’s long-anticipated Digital Dirham quietly slips past its original launch window, private institutions are moving faster.
RAKBANK, one of the country’s oldest banks, is pressing ahead and has received regulatory approval to launch an AED-backed stablecoin.
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RAKBANK’s AED Stablecoin Approval
RAKBANK’s in-principle approval from the CBUAE authorizes the bank to issue an AED-backed stablecoin under the Payment Token Services Regulation.
Raheel Ahmed, Group CEO of RAKBANK, said:
“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. It is another step in delivering banking that is digital with a human touch.”
This “in-principle” status is a preliminary nod, subject to fulfilling remaining regulatory and operational requirements before full launch.
Key features of the proposed stablecoin include:
- 1:1 Backing: Fully backed by AED reserves held in segregated, regulated accounts to ensure stability and redeemability.
- Transparency and Compliance: Reserves will be subject to independent audits, with real-time attestations via smart contracts, aligning with CBUAE’s emphasis on risk management and consumer protection.
- Use Cases: Designed for digital payments, tokenization of assets, and cross-border settlements, potentially integrating with RAKBANK’s existing crypto trading platform for retail access.
This makes RAKBANK the latest in a series of UAE institutions to venture into stablecoins, following approvals for entities like Zand Bank (Zand AED in November 2025) and AED Stablecoin LLC (AE Coin in October 2024).
RAKBANK is one of the UAE’s oldest banks with assets exceeding AED 88.3 billion ($24 billion USD) as of mid-2025.
Traditionally focused on retail, SME, and corporate banking, RAKBANK has increasingly embraced fintech and digital innovations to remain competitive in the UAE’s tech-forward economy.
In July 2025, RAKBANK became the first conventional UAE bank to integrate cryptocurrency trading directly into its mobile app, partnering with Bitpanda Technology Solutions under the oversight of Dubai’s Virtual Assets Regulatory Authority (VARA).
From CBDC Launch to Private Stablecoins, What Changed?
The Central Bank of the UAE (CBUAE) had initially targeted a retail launch of the Digital Dirham, the country’s CBDC, in Q4 2025.
The launch was part of the broader Financial Infrastructure Transformation program, which aimed to modernize payments and support digital economy use cases, such as cross-border transactions, via platforms like mBridge.
However, the launch did not occur as planned. On Nov. 13, 2025, reports indicated that the CBUAE delayed the rollout and suspended CBDC testing amid regulatory concerns over privacy, cybersecurity risks, and potential disruptions to the existing banking system.
As of early January 2026, the project remains in an exploratory and preparation phase, with no official launch announced.
Official CBUAE documents from July 2025 emphasize ongoing policy considerations and the CBDC’s role as legal tender, but provide no updated timeline beyond the original plans.
Recent developments have instead focused on related initiatives, such as a November 2025 federal law granting the Digital Dirham equal legal status to physical cash, and approvals for private AED-backed stablecoins, which are seen as complementary to the CBDC ecosystem but not a substitute for it.
The UAE government appears to have taken a cue from the United States. It has unofficially stalled its CBDC progress, focusing instead on AED-backed stablecoins offered by institutions like RAKBANK.
