UAE Launches First USD-Backed Stablecoin Under National Regulations

The UAE has approved its first U.S. dollar–backed stablecoin, marking a significant milestone in the country’s push to build a regulated digital finance ecosystem.

The token, known as USDU, has gone live under a national regulatory framework following approval from the Central Bank of the UAE (CBUAE), according to a release issued Thursday.

Key Points

• The Central Bank of the UAE approved a U.S. dollar–backed stablecoin under a national payments framework.
• Universal Digital issues the stablecoin under federal and ADGM regulatory oversight.
• USDU is backed 1:1 by U.S. dollar reserves held in onshore UAE bank accounts.
• Emirates NBD, Mashreq, and Mbank provide reserve banking support.
• Universal Digital has appointed Aquanow as a global distribution partner.

Central Bank Approval

The CBUAE granted authorization under its Payment Token Services Regulation, which governs the issuance, supervision, and management of payment tokens. With this approval, USDU is permitted to operate within the UAE’s formal payments infrastructure.

USDU is issued and managed by Universal Digital, which operates under the oversight of the Financial Services Regulatory Authority at Abu Dhabi Global Market. This structure provides regulatory supervision at both the federal level and within the financial free zone.

Reserve Structure and Banking Support

A core feature of the project is its reserve model. Universal Digital said USDU is fully backed by U.S. dollar reserves held on a one-to-one basis in safeguarded onshore accounts.

The reserves are maintained through partnerships with major local banks, including Emirates NBD and Mashreq, with Mbank also participating. The company said the banking relationships are designed to enhance trust and provide operational certainty for institutional users.

A Distinctive Global Position

Taken together, the regulatory framework and reserve safeguards position the UAE uniquely in the global digital payments landscape. According to the release, a U.S. dollar stablecoin is now operating under a central bank payments regime in the country, a step not yet fully realized in the United States, the European Union, or much of Asia.

In this context, Universal Digital framed the approval as a turning point for regulated digital value. Senior executive officer Juha Viitala said the registration delivers long-sought regulatory clarity for institutions, while backing from established UAE banks simultaneously strengthens confidence in the model.

Institutional Access and Global Distribution

As domestic operations begin, the company is also preparing for international distribution. Universal Digital has named Aquanow, a digital asset infrastructure company, as its global distribution partner to provide institutional investors with access to USDU in regions outside the UAE, in compliance with local regulations.

From the banking sector’s perspective, the launch reflects growing institutional interest in regulated digital instruments. Mashreq’s Group Head of Corporate and Investment Banking, Joel Van Dusen, said demand for compliant digital-value solutions continues to rise, thus calling USDU’s introduction a timely development for the market.

Broader Momentum in Crypto-Based Services

Meanwhile, the stablecoin approval comes as crypto adoption in the UAE expands beyond payments. Dubai Insurance has launched a crypto-enabled wallet allowing policyholders to pay premiums and receive claims using digital assets, including stablecoins.

The insurer described the offering as the first of its kind in the UAE market. Built on infrastructure from Zodia Custody, a crypto custody firm backed by Standard Chartered, the wallet emphasizes institutional-grade security and compliance with regulatory standards.