UAE's central bank has approved a USD-backed stablecoin

The Central Bank of the United Arab Emirates (CBUAE) has approved the country?s first USD-backed stablecoin under the bank?s Payment Token Services Regulation (PTSR), according to a press release on Thursday.

The issuance and management of the USDU token are handled by Universal Digital (LFGMF), which is regulated by the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM).

Reserves backing USDU are held 1:1 in safeguarded onshore accounts at Universal?s banking partners: Emirates NBD and Mashreq, with Mbank (MBAKF).

The regulatory move means a USD stablecoin is now live and operational under a central bank payments regime, putting the UAE ahead of the U.S., EU, and much of Asia, the release stated.

?USDU sets a new benchmark for regulated digital value,? said Juha Viitala, senior executive officer of Universal. ?Being the first Foreign Payment Token registered by the UAE Central Bank - and supported by leading UAE banks - gives institutions the clarity and confidence they have been waiting for. It lays the groundwork for a more transparent and efficient digital-asset market in the UAE and beyond.?

Digital asset infrastructure firm Aquanow has been appointed as a global distribution partner, supporting institutional access to USDU outside the UAE where permitted, Universal said.

?We see growing institutional interest in regulated digital-value instruments, and Universal?s introduction of USDU is a timely step that supports this market?s maturation,? said Joel Van Dusen, Group Head of Corporate and Investment Banking, Mashreq.