UAE Central Bank Approves First USD-Backed Stablecoin USDU Under National Payment Token Framework

Central Bank–Registered USDU Debuts as UAE’s First Regulated Dollar Stablecoin

TL;DR

• UAE central bank approved and saw the launch of USDU, the country’s first USD-backed stablecoin, on January 29, 2026
• USDU is issued by Abu Dhabi-based Universal Digital and operates under the Payment Token Services Regulation
• Token is backed 1:1 by U.S. dollars held with UAE banks and supported by institutional distribution partners

We’ve launched the all-new COIN360 Perp DEX, built for traders who move fast!

Trade 130+ assets with up to 100× leverage, enjoy instant order placement and low-slippage swaps, and earn USDC passive yield while climbing the leaderboard. Your trades deserve more than speed — they deserve mastery.

The Central Bank of the United Arab Emirates approved and saw the market debut of USDU on January 29, 2026, marking the first USD-backed stablecoin formally registered under the country’s national payment token framework. The approval places USDU within the Central Bank’s Payment Token Services Regulation, a regime governing issuance, reserve backing, custody, disclosures, and compliance for digital payment tokens operating in the UAE. The launch positions USDU as a regulated settlement instrument for digital asset transactions, distinct from unregistered foreign stablecoins circulating in global crypto markets tracked by the crypto price index and coin market cap data.

USDU is issued by Universal Digital International Limited, an Abu Dhabi-based firm regulated by the Financial Services Regulatory Authority of the Abu Dhabi Global Market. Universal Digital became the first entity registered as a Foreign Payment Token Issuer under the Central Bank’s rules, granting the token a unique regulatory status for institutional use. The stablecoin maintains a fixed 1:1 peg to the U.S. dollar, with each token backed by an equivalent dollar reserve, a structure designed to preserve parity with the U.S. currency used widely across global crypto price benchmarks.

Reserves backing USDU are held onshore in UAE bank accounts with Emirates NBD, Mashreq, and Mbank, embedding the token’s collateral within the domestic banking system. The reserve structure is subject to independent monthly attestations conducted by an international accounting firm, providing verification of backing levels under the regulatory framework. The Central Bank’s rules restrict registered foreign payment tokens from functioning as general-purpose money for everyday retail payments, limiting usage to approved digital asset and financial settlement contexts rather than consumer commerce.

The regulatory framework stipulates that digital asset and derivative transactions conducted within the UAE must be settled in fiat currency or in a registered foreign payment token, placing USDU among a narrow set of compliant instruments. Juha Viitala of Universal Digital said the approval gives institutions clarity, stating that the registration provides “the clarity and confidence they have been waiting for.” The structure differentiates USDU from widely used dollar stablecoins that remain outside the Central Bank’s registration regime despite their visibility in global coin market cap rankings.

Aquanow, a crypto infrastructure firm regulated by Dubai’s Virtual Assets Regulatory Authority, was appointed as USDU’s global distribution partner, enabling access for institutional participants where permitted by local regulations. Emirates NBD confirmed its role in supporting the reserve framework, with Anith Daniel, Group Head of Transaction Banking Services, saying the initiative aligns with the UAE’s regulated digital finance infrastructure and contributes to the country’s broader digital asset ecosystem. The approval follows recent stablecoin developments by other large financial players, including Fidelity’s move into regulated dollar-denominated digital assets and Tether’s expansion of compliance-focused products, as stablecoins increasingly intersect with formal financial systems.

Universal Digital has also referenced potential technical alignment with AE Coin, a dirham-pegged stablecoin that received in-principle approval from the Central Bank in 2024, allowing operational interaction between dollar- and dirham-based tokens within regulated environments, while broader crypto price movements continue to be reflected across global trading venues and coin market cap data.

This article has been refined and enhanced by ChatGPT.