UAE clears first dollar stablecoin under central bank rules

Universal said the registration makes it the UAE’s first Foreign Payment Token Issuer and gives market participants a regulated US dollar-denominated settlement option for digital assets inside the UAE’s payment-token framework. A company spokesperson said the PTSR included a transition period for issuers to become compliant and that USDU was the first USD stablecoin to obtain registration under the regime.

The stablecoin is issued as an ERC-20 token on Ethereum and is positioned for institutional and professional use, with a reserve model and banking links built around onshore custody. Universal said reserves are fully backed 1:1 by US dollars held in safeguarded onshore accounts at Emirates NBD and Mashreq, with Mbank acting as a strategic corporate banking partner and a global accounting firm providing monthly independent attestations. Universal is also regulated by Abu Dhabi Global Market’s Financial Services Regulatory Authority (FSRA) with permission to issue a fiat-referenced token, and said it now sits under dual oversight through FSRA regulation and CBUAE registration for payment-token activities. The company said that dual framework raises discipline around reserve custody, governance, disclosures and operational controls, and provides a clearer compliance pathway for certain regulated use cases.

Under the PTSR, payments for digital assets and digital asset derivatives in the UAE may be conducted only in fiat or a Registered Foreign Payment Token. Universal said USDU is currently the only USD stablecoin that formally meets those requirements, while noting it is not permitted for general retail payments in the mainland, where dirham-denominated instruments remain the standard.

For distribution, Universal appointed Aquanow, regulated under Dubai’s Virtual Assets Regulatory Authority (VARA), as its global distribution partner to broaden institutional access and integrate USDU into regulated digital asset infrastructure for on- and off-ramps and settlement use cases. Universal also said it is working with AE Coin, a UAE dirham-denominated stablecoin licensed by the CBUAE, to enable future conversion between USDU and AE Coin for domestic settlement.