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UAE Debuts First Central Bank-Approved Stablecoin USDU

2 hours ago
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Key Notes

  • The UAE central bank has approved USDU.
  • USDU is the country’s first fully regulated, dollar-backed stablecoin.
  • USDU is issued by Universal Digital and backed 1:1 by US dollars held at Emirates NBD and Mashreq.

The Central Bank of the United Arab Emirates has approved USDU, the country’s first USD-backed stablecoin. The approval came on Thursday under the Payment Token Services Regulation. Notably, the stablecoin is backed one-to-one by the US dollar and operates under direct central bank oversight.

This is the first time a dollar-denominated stablecoin has received formal approval from the UAE central bank. The token is now part of the country’s regulated payment system rather than sitting outside the banking framework.


 

It is also important to note that Aquanow, a crypto financial services provider, has been appointed as the global distribution partner. A press release said that the firm will help in “expanding institutional access to USDU across multiple markets.”

Regulatory Structure and Issuance Model

USDU is issued and managed by Universal Digital. The firm operates under the Financial Services Regulatory Authority at Abu Dhabi Global Market. With this approval, Universal Digital has become the first Foreign Payment Token Issuer registered by the UAE central bank.

USDU is registered as a foreign payment token. This allows a USD-pegged digital asset to function inside a bank-regulated settlement environment. The framework gives legal clarity on issuance, custody, and reserve handling.

Moreover, USDU reserves are held fully in US dollars while funds sit in safeguarded on-shore accounts at Emirates NBD and Mashreq. The backing remains one-to-one at all times. Also, Mbank supports Universal Digital as a core corporate banking partner.

“We see growing institutional interest in regulated digital-value instruments, and Universal’s introduction of USDU is a timely step that supports this market’s maturation,” said Mashreq exec Joel Van Dusen.

Parallel Expansion in Real-World Crypto Use

At the same time, Dubai Insurance has launched a crypto insurance wallet. Policyholders can now pay premiums and receive claims in digital assets, including stablecoins. This is the first service of its type in the UAE insurance market.

 

The wallet runs on infrastructure from Zodia Custody, a crypto custody firm backed by Standard Chartered. The setup focuses on institutional security and regulatory alignment.

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Parth Dubey

A crypto journalist with over 5 years of experience in the industry, Parth has worked with major media outlets in the crypto and finance world, gathering experience and expertise in the space after surviving bear and bull markets over the years. Parth is also an author of 4 self-published books.

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Source: https://www.coinspeaker.com/uae-debuts-first-central-bank-approved-stablecoin-usdu/