UAE Gets First Central Bank–Registered US Dollar Stablecoin With USDU Launch
The Central Bank of the United Arab Emirates has approved the launch of USDU, a U.S. dollar–backed stablecoin, marking the first time a USD-pegged digital currency has been formally registered under the country’s central banking framework.
The approval was granted on Thursday under the UAE’s Payment Token Services Regulation (PTSR), positioning USDU within the country’s regulated payments and digital asset infrastructure. The stablecoin is issued by Universal Digital, a firm regulated by the Abu Dhabi Global Market’s .
With the registration, Universal becomes the first issuer of a foreign payment token approved by the UAE’s central bank. This allows banks and licensed financial institutions to integrate USDU directly into their existing systems, offering a more efficient route for settling U.S. dollar–denominated digital asset transactions within a compliant framework.
Dual Regulatory Oversight Strengthens Compliance
USDU operates under dual oversight from both the FSRA and the Central Bank of the UAE, a structure that places additional compliance obligations on reserve management, governance, disclosures, and operational controls.
According to Universal executive Juha Viitala, this layered regulatory model introduces a higher standard of discipline across the stablecoin’s operations, while also providing clearer compliance pathways for regulated institutional use cases.
The arrangement is expected to appeal to financial institutions viewking regulated exposure to digital settlement instruments without regulatory amlargeuity.
Technical Structure and Reserve Management
USDU is expected to launch as an ERC-20 token on the ETH blockchain, which remains the largest network for stablecoin issuance by . ETH’s established infrastructure and liquidity make it a preferred choice for institutional-grade stablecoin deployment.
The stablecoin is fully backed on a one-to-one basis by U.S. dollar reserves. Custody of the reserves is handled by major UAE banking institutions, including Emirates NBD and Mashreq, while independent monthly attestations are conducted to ensure transparency and reserve integrity.
Commenting on the launch, Mashreq’s Group Head of Corporate and Investment Banking, Joel Van Dusen, said the introduction of USDU comes at a critical moment, as institutional demand for regulated digital-value instruments continues to rise. He noted that such initiatives support the maturation of digital asset markets by aligning innovation with regulatory certainty.
Institutional Demand Drives Stablecoin Expansion
Institutional interest in digital assets and stablecoins has expanded sharply since 2025, driven by the need for quicker settlement, improved capital efficiency, and regulatory clarity.
Large financial institutions globally have increasingly entered custody, settlement, and tokenization partnerships, reflecting this broader shift toward regulated digital finance.
USDU’s launch aligns with this trend, positioning the UAE as a jurisdiction that prioritizes compliance-led adoption rather than speculative experimentation.
Stablecoin Growth and Policy Implications
Globally, governments and regulators have accelerated efforts to establish formal frameworks for stablecoins, particularly following the enactment of the . This has intensified competition among jurisdictions to attract compliant stablecoin issuers and digital asset infrastructure providers.
While many countries have explored stablecoins backed by domestic currencies, the UAE’s decision to approve a U.S. dollar–backed token stands out. The move reflects the dollar’s continued dominance in global trade and financial settlement, even as other regions pursue currency-sovereign alternatives.
With USDU now formally registered, the UAE strengthens its position as a bridge between traditional finance and blockchain-based settlement, offering institutions a regulated on-ramp into dollar-denominated digital assets.
