UAE Launches USDU as First Central Bank Approved Stablecoin

Regulated stablecoin issuance has taken a decisive step forward in the Middle East, as authorities in the United Arab Emirates approve a new dollar-backed digital currency designed for institutional use.

Good to Know

• USDU is the first central bank approved stablecoin in the UAE
• The token is fully backed by U.S. dollars held at major UAE banks
• USDU holds a regulatory status that USDC does not currently have

USDU Launch Gives UAE a First Mover Advantage

Universal Digital Intl Limited has launched USDU, marking the first stablecoin approved directly by the Central Bank of the UAE. The rollout places the country firmly into the regulated stablecoin landscape as regional competition around digital payments accelerates.

USDU is registered as a Foreign Payment Token, making Universal Digital the first issuer authorized under that category, according to reporting from The Block. The approval allows USDU to settle digital asset transactions under UAE rules with full central bank recognition.

The stablecoin is backed one to one by U.S. dollars held at leading UAE banks, including Emirates NBD, Mashreq, and Mbank. That structure positions USDU as the only stablecoin with official settlement status for compliant digital asset activity in the country.

Regulatory Gap Separates USDU and USDC

Circle continues to expand across the region through USDC, but regulatory positioning differs. In December, Circle secured approval from Abu Dhabi Global Market to operate as a money services provider, allowing payment activity across the UAE and the wider Middle East.

However, that authorization does not include registration with the Central Bank of the UAE. As a result, USDC can operate locally without access to the same settlement framework available to USDU.

For banks, payment firms, and institutions that require full central bank alignment, the distinction matters. USDU enters the market with a regulatory structure designed specifically for compliant settlement of digital asset transactions.

Infrastructure Partnership Supports Distribution

To support integration, Universal Digital partnered with Aquanow, a Dubai based crypto infrastructure provider regulated by the Virtual Assets Regulatory Authority. The collaboration connects USDU with exchanges, custodians, and payment platforms operating across the region.

The partnership aims to place USDU directly into existing digital asset rails rather than positioning it as a standalone product. That approach aligns with growing demand for regulated settlement assets inside institutional workflows.

UAE Crypto Strategy Continues Momentum

The USDU launch fits into a wider national effort to position the UAE as a global crypto and digital finance hub. Regulators across Abu Dhabi and Dubai have focused on licensing clarity, infrastructure standards, and institutional participation.

Interest in stablecoins has grown globally as traditional firms enter the space. Recent developments include plans by Tether to issue a U.S. compliant stablecoin and the release of the FIDD token by Fidelity.

Against that backdrop, the arrival of a central bank approved stablecoin adds another layer to the regional competition around digital payments, cross border settlement, and regulated crypto finance.

FAQ

What is USDU?

USDU is a U.S. dollar backed stablecoin approved by the Central Bank of the UAE.

Who issues USDU?

Universal Digital Intl Limited is the authorized issuer.

How is USDU backed?

USDU is fully backed by U.S. dollars held at major UAE banks, including Emirates NBD, Mashreq, and Mbank.

How does USDU differ from USDC in the UAE?

USDU holds central bank approval for settlement, while USDC operates under a separate license without central bank registration.

Who supports USDU infrastructure?

Universal Digital partnered with Aquanow, a VARA regulated crypto infrastructure provider in Dubai.