RAK BANK Secures Preliminary Approval for Dirham-Backed Stablecoin - A Game-Changer for UAE’s Digital Economy

Move over, dollar-pegged tokens—the UAE's dirham is stepping into the crypto ring. RAK BANK just scored preliminary regulatory approval to launch a stablecoin backed by the national currency, marking a pivotal moment for Middle Eastern finance.

Why This Isn't Just Another Stablecoin

This isn't about copying USDC or Tether's playbook. A dirham-pegged digital asset fundamentally reshapes regional trade, remittances, and corporate treasury management. It bypasses the traditional dollar intermediary for intra-GCC transactions, potentially slashing costs and settlement times from days to seconds.

The Regulatory Green Light

Preliminary approval means the Financial Services Authority (FSA) sees the framework. Now comes the hard part: operationalizing compliance, liquidity pools, and bulletproof 1:1 reserves. The bank must now prove its tech and treasury ops are as solid as the currency backing it—no small feat in a sector where 'fully backed' has been a controversial promise.

A Direct Challenge to the Dollar's Dominance?

Don't expect the greenback to sweat just yet. But for regional businesses, this offers a digital tool immune to Fed policy swings and cross-border banking friction. It's a sovereign digital currency proxy, launched by a commercial bank rather than the central bank—a fascinating hybrid model.

The Bottom Line

If executed flawlessly, this stablecoin could become the preferred digital settlement layer for the UAE's booming trade corridors. If it stumbles? It'll be another case study for finance textbooks on how traditional banks fumbled their crypto debut. Either way, the global race for relevant digital assets just added a major regional contender—because sometimes the future of finance isn't a revolution, it's just a better-pegged bank ledger.

Features of RAK BANK’s AED stablecoin

As per the announcement, the AED stablecoin will combine the confidence of traditional banking and the efficiency of blockchain. It will feature a 1:1 backing AED, regulated to support full redemption at par value. It will include audited smart contracts with real-time reserve attestations that support transparency.

Raheel Ahmed, Group CEO of RAK BANK, noted that this in-principle approval reflects their focus on responsible innovation, regulated and built on trust. He explains, “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. It is another step in delivering banking that is digital with a human touch.”

FAB Bank and Crypto.com have also announced AED stablecoin projects

In October, Dubai’s Department of Finance (DoF), in collaboration with Dubai Land Department (DLD) and with the support of Dubai Pay platform from Digital Dubai Authority, as well as Foris Dax, represented by Crypto.com and Emirates NBD, successfully trialed the payment settlement of cryptocurrencies to AED Dirhams and AED stablecoin for Dubai government services fees.

The DLD explained that the transaction tested successfully was for the “Issuance of a Property Map” service, as part of testing new technologies and systems within a secure environment before the official launch in the future.

Moreover, Abu Dhabi FAB Bank announced that it was working on an AED stablecoin to be built on the ADI Chain. The ADI Blockchain Foundation will develop an AED stablecoin to be issued by First Abu Dhabi Bank, with the support of ADQ, a sovereign investor, and IHC, another investor.

MBANK was the first to issue a regulated AED Stablecoin in the UAE

However, neither RAK BANK nor FAB will be the first banks to issue a regulated stablecoin. Al Maryah Community Bank was the first to do so with AE Coin. The AE Coin has been incorporated into not only governmental entities but also private sector companies within the UAE.

The race towards the issuance and utilization of AED stablecoins has progressed in the UAE, with Tether one of the first to announce it would launch an AED stablecoin, which is still clearly out of the picture.

Get seen where it counts. Advertise in Cryptopolitan Research and reach crypto’s sharpest investors and builders.