- RAKBank received in-principle approval on Jan. 7 from the Central Bank of the UAE (CBUAE) to issue a dirham-backed payment token.
- The planned token will be backed 1:1 by dirhams held in segregated, regulated accounts and governed by audited smart contracts with real-time reserve attestations.
- The UAE has a multi-agency digital assets framework, with several regulators defining rules for stablecoins and tokenized payments.
- Non-crypto firms and global issuers are active in the UAE stablecoin space, including pilots by telecoms and approvals for USDC and Ripple USD in Abu Dhabi.
- Key questions remain on blockchain rails, interoperability, rules between federal and free-zone regimes, and market adoption as a payments tool (market adoption report).
On Jan. 7, the Central Bank of the UAE (CBUAE) granted in-principle approval for RAKBank to issue a UAE dirham–backed payment token, subject to final regulatory and operational conditions. The bank is already licensed and supervised by the CBUAE, and must meet the regulator’s requirements before any live issuance.
In a press release, the bank said the token will be fully backed 1:1 by dirhams held in segregated, regulated accounts. The issuer also stated the token will be governed by audited smart contracts with real-time reserve attestations.
The move follows the bank’s 2025 step to allow retail customers to trade cryptocurrencies through a regulated brokerage partner. “An important milestone” and “innovation that is responsible, regulated, and built on trust,” are the words used by Raheel Ahmed, Group CEO of RAKBank, to describe the approval.
The UAE’s regulatory landscape includes the CBUAE, the Abu Dhabi Global Market, and Dubai’s Virtual Assets Regulatory Authority, among others. Policymakers see dirham-referenced payment tokens as tools to modernize domestic payments and improve cross-border flows, as described in rules that are intended to support digital economy initiatives.
Non-crypto incumbents and global issuers are already active: telecom operator e& (Etisalat) pilots an AE Coin for bill payments, while firms like Circle and Ripple have secured approvals in Abu Dhabi for USDC and Ripple USD. At the emirate level, RAK DAO is advancing legal frameworks and a “Builder’s Oasis” accelerator backed by a $2.0 million fund for AI, gaming, and blockchain startups.
Open questions include which blockchain rails the dirham token will use, interoperability with global stablecoin systems, and how federal and free-zone rules will interact. Practical market adoption for treasury, remittance, and payment use remains an outstanding challenge, according to industry assessments and reports (market adoption report).
✅ Follow BITNEWSBOT on Telegram, Facebook, LinkedIn, X.com, and Google News for instant updates.
Previous Articles:
- SEC Approves Bitwise Chainlink ETF, LINK Heads to NYSE Live!
- Jensen Huang: Bitcoin stores energy, AI a universal currency
- Bitcoin-Yen Correlation Hits Record 90-Day High, 73% Fit Now
- Politicians Fuel Memecoin Frenzy; Market Crashes 65% in 2025
- Dogecoin, Cardano Slip While Stocktwits Shows Fervent Bulls!
