UAE RAKBank approved for stablecoin business…'Digital Dirham' business accelerates

UAE-based RAKBank has obtained approval for a stablecoin business.

RAKBank said it has received in-principle approval from the UAE Central Bank (CBUAE) to issue a stablecoin backed by the UAE's legal tender, the dirham (AED). RAKBank said, "(The approval) is conditional on meeting regulatory and operational requirements," adding, "(RAKBank's) stablecoin will be backed one-to-one by the value of the dirham," and, "(the reserve assets) will be deposited with a separate regulatory authority to redeem the face value in full."

RAKBank's approval is expected to intensify competition in the UAE stablecoin market. Earlier, UAE telecoms company e& launched a pilot of the dirham-based stablecoin AE Coin last month.

Cointelegraph reported, "Global companies such as Circle (USDC) and Ripple have also secured stablecoin approvals in Abu Dhabi, UAE," adding, "Competition for stablecoins in the UAE is not limited to crypto companies or foreign issuers."