The UAE’s First Stablecoin #

The UAE’s dirham stablecoin race is gaining momentum as RAKBANK received in-principle approval to participate in issuing a regulated AED-backed stablecoin. The move reflects the Central Bank of the UAE’s broader strategy to establish a compliant digital currency framework that supports payments, settlements, and emerging tokenized financial services. By allowing regulated banks to play an active role, authorities are signaling that stablecoins are expected to complement, rather than disrupt, the traditional financial system.

RAKBANK’s entry adds to growing competition among banks and fintechs seeking to shape the UAE’s stablecoin landscape, as market participants race to define standards around governance, reserve management, custody, and interoperability. These stablecoins are positioned as practical infrastructure for faster domestic transactions, programmable payments, and more efficient cross-border settlements, while remaining fully aligned with regulatory requirements.

For the UAE, the initiative strengthens its ambition to become a global hub for digital finance and regulated crypto innovation. By anchoring stablecoin issuance to the dirham and placing it under central bank oversight, policymakers aim to foster trust, attract institutional adoption, and encourage real-world use cases beyond trading. The approach highlights how the UAE is leveraging regulation to accelerate blockchain-based payment infrastructure at scale.