UAE Central Bank Approves First USD-Backed Stablecoin, USDU

The Central Bank of the United Arab Emirates (CBUAE) has granted regulatory approval for the nation’s first USD-backed stablecoin, USDU. Formalizing its status within the country’s digital asset payments framework.

The token, issued by Universal Digital International Limited, is now registered under the CBUAE’s Payment Token Services Regulation (PTSR). Making it a compliant payment token for digital asset settlement within the UAE.

This development places the UAE among the earliest major jurisdictions to approve a central bank-recognized USD-pegged stablecoin. Therefore, this signals a firm regulatory commitment to integrating digital settlement assets into the financial system.

USDU Registered Under Central Bank Digital Asset Framework

Under the CBUAE’s PTSR, digital asset payments and settlements in the UAE must be conducted using fiat currency or a Registered Foreign Payment Token.

Moreover, USDU is the first such stablecoin to meet this requirement. Providing a formally sanctioned USD-denominated settlement option for digital assets and derivatives.

Universal Digital, the issuer of USDU, operates under the Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market (ADGM). Giving the initiative dual regulatory oversight.

Major UAE banks, including Emirates NBD and Mashreq Bank, hold the onshore USD reserves backing USDU on a strict 1:1 basis.

Additionally, independent monthly attestations are conducted to verify these reserves. Indeed, a key element in maintaining transparency and financial integrity under the new regime.

This structure reflects a broader policy intent by UAE authorities to provide certainty for institutions engaging with digital assets while ensuring core financial safeguards are in place.

What this Approval Means for Digital Finance in the UAE

The regulatory green light for USDU marks a significant shift in how digital assets are treated within a national payment framework. Moreover, stablecoins are used globally for trading and liquidity functions.

However, formal approval within a central bank’s regulatory perimeter brings a higher level of legal certainty and compliance expectations. Also, the UAE created a model for how tokens can coexist with traditional banking infrastructure.

In practical terms, this gives licensed financial institutions a compliant instrument for settling transactions. Therefore, it reduces reliance on unregistered digital tokens and clarifies reporting and operational requirements.

Looking ahead, USDU’s operational rollout and integration with payment and settlement systems will be a key indicator of how regulated stablecoins can function at scale.

Furthermore, its success could influence other jurisdictions considering similar regulatory frameworks. Helping advance global standards for bank-registered digital asset infrastructure.

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