In a significant advancement for the United Arab Emirates’ digital finance sector, RAKBank has obtained preliminary regulatory authorization from the Central Bank of the UAE (CBUAE) to develop a national dirham-backed stablecoin. This approval, announced on Wednesday, January 7, 2026, positions the institution as a pioneer in the nation’s rapidly evolving cryptocurrency landscape.
The bank clarified that while this in-principle endorsement represents a crucial regulatory milestone, additional operational and compliance requirements must be fulfilled before implementation. Specific details regarding the pilot phase and subsequent expansion will be disclosed as development progresses.
Stablecoins represent a specialized category of cryptocurrency engineered to maintain consistent valuation by anchoring their worth to stable reserve assets. Unlike highly volatile digital currencies such as Bitcoin, these instruments typically derive their stability from fiat currency reserves or commodity backing. RAKBank’s proposed solution will feature 1:1 dirham backing, with funds held in segregated, regulated accounts to ensure full redemption capability at par value.
RAKBank Group CEO Raheel Ahmed characterized the development as reflecting the institution’s dedication to “innovation that is responsible, regulated, and built on trust.” This initiative aligns with the bank’s ongoing digital asset strategy, which previously included enabling retail cryptocurrency trading through regulated brokerage partnerships in 2025.
The UAE’s stablecoin market continues to demonstrate robust growth, with November 2025 witnessing regulatory approval for Zand Bank’s multi-chain dirham-backed stablecoin. Globally, the stablecoin market capitalization surpassed $300 billion in October 2025, reaching $308.21 billion by early January 2026, dominated primarily by Tether’s USDT and Circle’s USDC offerings.
Ahmed further emphasized the bank’s commitment to “developing solutions designed around customer needs while supporting the UAE’s vision for a future-ready financial system,” describing the initiative as part of their broader philosophy of delivering “banking that is digital with a human touch.”