The Central Bank of the United Arab Emirates has approved the country’s first U.S. dollar backed stablecoin, marking a significant step in the region’s regulated digital asset framework. The stablecoin, known as USDU, is designed to support compliant settlement activity across crypto and derivatives markets. According to official disclosures, USDU maintains full one to one reserves backed by U.S. dollars, with funds safeguarded in onshore accounts held at partner banks within the UAE. The token is issued and managed by a regulated entity, Universal Digital, under the central bank’s payment token framework. Monthly independent attestations are built into the structure, reinforcing transparency and reserve verification. The approval positions USDU as a regulated settlement instrument rather than a speculative product, aligning with the UAE’s broader push to integrate digital assets into its financial system under supervisory oversight.
The stablecoin is supported by several major UAE banking institutions, including Emirates NBD and Mashreq, with Mbank acting as a strategic banking partner. Global crypto infrastructure firm Aquanow will serve as a distribution partner, enabling professional and institutional access to USDU beyond the UAE where regulations allow. Market participants view the approval as a response to rising institutional demand for stablecoins that meet clear regulatory standards. By anchoring reserves onshore and partnering with established banks, the structure aims to address long standing concerns around custody, transparency, and counterparty risk. Industry executives said the framework provides clarity for institutions seeking to use stablecoins for settlement and treasury functions without stepping outside regulatory boundaries.
The move reflects the UAE’s growing role in the global stablecoin landscape, particularly across the Middle East and North Africa region. Regulators have increasingly emphasized payment efficiency, cross border settlement, and financial infrastructure modernization as key priorities. A regulated dollar stablecoin could reduce transaction costs and settlement times for international flows, strengthening the region’s competitiveness as a financial hub. The approval follows earlier steps by the UAE to explore local currency stablecoins, including progress on dirham pegged payment tokens designed for domestic use. Together, these initiatives suggest a dual track strategy that supports both local payments and international dollar based settlement within a supervised framework, reinforcing the UAE’s position as a leading jurisdiction for regulated digital asset adoption.
