Paul Johnson Universal Digital introduces USDU, the first US dollar stablecoin registered by the Central Bank of the UAE, marking a milestone in the country’s regulated digital finance ecosystem.
Abu Dhabi Firm Launches USDU as UAE’s First Regulated US Dollar Stablecoin
Abu Dhabi-based Universal Digital has made a historic move in the digital asset landscape with the launch of USDU, the first US dollar stablecoin officially registered under the Payment Token Services Regulation by the Central Bank of the United Arab Emirates. The development places the UAE at the forefront of global financial innovation, bridging traditional banking standards with blockchain transparency.
The introduction of this regulated US dollar stablecoin sets a new precedent for compliance and clarity in the country’s expanding digital finance sector. Universal Digital’s registration under the UAE’s Payment Token Services Regulation designates it as the nation’s first recognized Foreign Payment Token Issuer, opening a compliant path for institutions seeking trusted digital settlement options.
Strengthening UAE’s Digital Financial Infrastructure
According to Universal Digital executives, the new framework under the Payment Token Services Regulation provides a structured route for digital currency issuers to align with financial oversight. The company’s registration means regulated financial entities in the UAE, including banks, brokers, and licensed trading venues, now have access to a fully compliant US dollar stablecoin for settlements and digital asset transactions.
Unlike other global tokens such as Tether or USD Coin, which are widely used but remain outside the UAE’s regulatory perimeter, USDU operates directly within the Central Bank’s approved ecosystem. This ensures all payments related to digital assets and derivatives in the country adhere to official fiat or registered token guidelines, reinforcing investor confidence and institutional integrity.
Juha Viitala, Senior Executive Officer at Universal Digital, emphasized that this dual registration under both the Abu Dhabi Global Market’s Financial Services Regulatory Authority and the Central Bank imposes stringent standards for governance, reserves, and disclosure. Viitala noted that such oversight enhances operational discipline and provides financial institutions with a more transparent compliance pathway.
Institutional Adoption and Banking Partnerships
USDU has been structured with a conservative reserve model to ensure 1:1 backing with real US dollars. These reserves are safeguarded through onshore accounts at major UAE banks including Emirates NBD and Mashreq, with Mbank serving as a strategic partner. Independent attestations are conducted monthly by a global accounting firm to verify transparency and maintain user confidence.
This multilayered structure highlights the UAE’s push to integrate digital assets into its banking framework while maintaining accountability. Universal Digital retains responsibility for meeting issuance and redemption obligations, while the banking partners handle reserve custody and safeguard funds.
The result is a robust, transparent US dollar stablecoin ecosystem that combines blockchain efficiency with the credibility of regulated financial oversight.
Expanding Access Through Aquanow
In a further sign of institutional alignment, Universal Digital has partnered with Aquanow regulated under Dubai’s Virtual Assets Regulatory Authority — as its official global distribution partner. The collaboration aims to integrate USDU into digital asset infrastructure, supporting regulated settlement, on and off ramps, and cross-border institutional payments.
USDU’s institutional focus means it will serve as a settlement and payment tool for digital assets and derivatives within the UAE but not as a retail payment method. Dirham-based instruments remain the standard for consumer transactions within the mainland.
To enhance domestic interoperability, Universal Digital is also exploring integration with AE Coin, a dirham-pegged stablecoin licensed by the Central Bank of the UAE. This future linkage between the two tokens will enable seamless conversion between US dollar and dirham stablecoins, creating a unified payment network across the Emirates.
UAE’s Strategic Leap into Regulated Digital Finance
The UAE has rapidly become one of the leading jurisdictions globally for regulated digital finance innovation. With frameworks like the Payment Token Services Regulation and regulatory entities such as VARA and ADGM’s FSRA, the nation has created a multi-tiered structure that encourages blockchain adoption without compromising compliance.
The launch of USDU represents a milestone within this broader vision a local solution for a global problem. By providing a regulated US dollar stablecoin, Universal Digital is addressing long-standing institutional challenges related to cross-border settlement, liquidity management, and audit transparency.
Market analysts note that this development could set the stage for wider institutional participation in the region’s digital asset ecosystem. The combination of strict regulatory oversight and reliable banking partnerships is likely to attract asset managers, payment service providers, and digital asset exchanges seeking stable, compliant, and transparent settlement instruments.
As the UAE strengthens its role as a global financial hub, the creation of a Central Bank-registered US dollar stablecoin marks an important leap forward in integrating blockchain into regulated finance. It signals a new chapter where trust, compliance, and technology converge to redefine the future of digital money.
Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards.
