The Central Bank of the United Arab Emirates (CBUAE) has approved USDU, a USD-backed stablecoin issued by regulated crypto firm Universal Digital.
The approval marks the first stablecoin authorised under the Central Bank of the United Arab Emirates' Payment Token Services Regulation (PTSR), introduced to govern digital payment tokens in the UAE. Universal Digital, which operates under the supervision of the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM), will issue and manage the token.
Reserve structure and distribution framework
USDU operates on a 1:1 reserve model, with backing held in onshore accounts at Emirates NBD, Mashreq, and Mbank. The reserve structure is designed to provide transparency for institutional users seeking regulated digital asset instruments.
Digital asset infrastructure provider Aquanow has been appointed as a global distribution partner to facilitate institutional access to USDU in jurisdictions outside the UAE, where permissible. The distribution framework targets institutional demand for stablecoins operating within central bank regulatory frameworks.
The UAE's regulatory timeline places it ahead of jurisdictions including the US and the EU in implementing a central bank payments regime for stablecoins. The Payment Token Services Regulation establishes requirements for stablecoin issuers operating in the UAE, including reserve custody and supervisory oversight standards.
Talking about the regulatory move, Juha Viitala, Senior Executive Officer of Universal Digital, said that, coming as the first Foreign payment Token registered by the CBUAE and supported by banks across the region, USDU provides institutions with increased confidence and clarity. Additionally, the stablecoin lays the foundation for a more transparent and efficient digital asset market in the UAE and across borders.
Furthermore, CBUAE's approval of USDU follows the central bank's announcement from August 2025 regarding its decision to move toward the launch phase of its digital currency, the Digital Dirham. This came after the receipt of the technology and legal framework needed to offer the Digital Dirham for everyday use. At that time, CBUAE mentioned that the digital currency was set to be launched in phases, starting with a two-tier system in which the financial institution was set to issue and redeem Digital Dirhams to licensed financial organisations, which would then distribute them to users through wallet-based accounts.
