RAKBANK received in-principle approval from the Central Bank of the UAE (CBUAE) on January 7, 2026 to issue an AED-backed stablecoin, tightening the competitive race under the UAE’s Payment Token Services Regulation (PTSR). The signal is that the dirham stablecoin market is moving from “announcements” to staged regulatory execution, with banks and large issuers now competing on time-to-launch and operational controls.
This approval sits inside a framework the CBUAE implemented on August 21, 2024, built around licensing, transparency, and consumer protection while still supporting tokenization, payments, and cross-border settlement use cases. The UAE is effectively standardizing stablecoins as regulated payment infrastructure, not as lightly supervised crypto products.
How the UAE Framework Is Shaping the Market
The PTSR created a national pathway where issuers can progress from in-principle status to full approval. That staged model is already visible in the market: AE Coin (e&) obtained final approval in December 2024, Zand Bank secured full approval for a multi-chain AED token in late 2025, and RAKBANK is now at in-principle status as of January 2026. The competitive pressure now shifts to operational readiness: who can meet the conditions fastest without failing reserve and audit expectations.
The regulator’s emphasis is familiar to institutions: 1:1 reserve backing, segregated custody for reserves, and independent attestations and audits. The narrative in the text compares this posture to MiCA-like outcomes—strong reserve discipline and audit cadence—while keeping the approach locally tailored. The practical point is that “compliance by design” is the entry ticket for dirham stablecoin issuance.
Where the Competitive Field Stands
Several issuers are now positioned across different readiness levels and distribution channels:
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RAKBANK: in-principle approval (Jan 7, 2026) for a 1:1 AED-backed token, with plans for segregated reserves plus audited smart contracts and attestations. The bank now has regulatory momentum but still needs to clear implementation conditions.
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Zand Bank: final approval in late 2025 for a multi-chain AED token aimed at payments and tokenization with partners. This sets a benchmark for execution speed and institutional positioning.
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AE Coin (e&): final approval (Dec 2024) with pilot usage focused on telecom-linked bill payments. It’s a distribution-led model rather than purely bank-led issuance.
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IHC, ADQ, and First Abu Dhabi Bank: announced plans for a dirham token on ADI Chain, with regulation/hosting details still in progress. This reads as a platform-and-infrastructure play with governance still being finalized.
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Global issuers (e.g., Circle and Ripple): reported engagement and approvals in Abu Dhabi for USD products and regional expansion. That backdrop suggests the UAE is becoming a jurisdictional hub where local AED rails and global stablecoin frameworks converge.
What Operators Need to Do Next
For custodians, VASPs, and corporate treasuries, the near-term work is operational, not theoretical. Staged approvals only become usable liquidity when reserve segregation, real-time attestation, and audit-ready reporting are embedded into day-to-day treasury workflows. That includes technical controls—audited smart contracts, proof of 1:1 backing, and custody segregation—plus governance controls that survive regulatory reviews.
There’s also an integration layer to solve. For DFSA-licensed firms in financial free zones, these dirham tokens could improve settlement and liquidity, but the value depends on clean interoperability between national CBUAE licensing and zone-specific rules. If those rails don’t connect smoothly, the token may be “approved” without being “useful at scale.”
What happens next is a conversion test: can RAKBANK move from in-principle approval to full operational issuance, and can the ecosystem standardize attestations, reserve custody, and audited contract controls across issuers? The winners will be the ones that make compliance and interoperability feel invisible to end users. If they succeed, AED stablecoins can become real settlement infrastructure; if they don’t, adoption will remain fragmented and slow.
