The Central Bank of the United Arab Emirates (UAE) said on Thursday it had approved the first US dollar-backed stablecoin – dubbed USDU, enabling compliant settlements for cryptos and derivatives.
According to a press release, the stablecoin maintains 1:1 reserves, protected in onshore accounts with partner banks. The token is issued and managed by a regulated entity, Universal Digital.
Universal’s banking partners include Emirates NBD and Mashreq, with monthly independent attestation. Meanwhile, Mbank serves as a strategic banking partner.
Additionally, Aquanow, a crypto infrastructure company, serves as a global distribution partner. It also supports business customer access to USDU outside the UAE, wherever permitted.
“Being the first foreign payment token registered by the UAE Central Bank – and backed by major UAE banks – gives institutions the clarity and confidence they have been waiting for,” said Juha Viitala, CEO of Universal Digital.
USDU Stablecoin Meets Institutional Demand
The stablecoin responds to institutional demand for regulatory transparency in digital assets, the statement said.
USDU potentially reduces cross-border settlement costs, thereby improving the MENA region’s competitiveness in the global stablecoin market.
Stablecoins have been gaining ground in the Middle East region. The UAE Central Bank has granted in-principle approval to the AED stablecoin in 2024. Under the new Payment Token Services Regulation, the dirham-pegged AE Coin functions as both a local trading pair and a widely accepted payment method for everyday transactions within the UAE.
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