Abu Dhabi–based Universal Digital has introduced USDU, becoming the first issuer of a US dollar–backed stablecoin to be registered by the Central Bank of the United Arab Emirates as a Foreign Payment Token under the Payment Token Services Regulation. According to a statement shared with Cointelegraph, the registration positions Universal as the UAE’s first Foreign Payment Token Issuer and establishes a regulated, dollar-denominated settlement instrument for digital asset activity in the country.

Juha Viitala, a senior executive officer at Universal, said the PTSR framework included a transition period that allowed payment token issuers to align with its requirements. He noted that, among US dollar stablecoins, USDU was the first to complete this process and obtain registration under the regime.

Dual oversight and implications for institutions

Universal is regulated by the Abu Dhabi Global Market’s Financial Services Regulatory Authority, which has authorized the firm to issue a fiat-referenced token, while the company is now also registered with the UAE central bank for payment-token activities. Viitala said this combination of oversight imposes a “higher level of discipline across reserve custody, governance, disclosures, and operational controls,” adding that “registration provides a clearer compliance pathway for certain regulated use cases.”

As a result, regulated entities such as banks, brokers and licensed trading venues in the UAE now have access to a central-bank-registered US dollar token that can be integrated into existing compliance, settlement and reporting systems. Under the PTSR, payments involving digital assets and related derivatives in the UAE are permitted only in fiat currency or a Registered Foreign Payment Token.

While global stablecoins like Tether’s USDt and Circle’s USDC are widely used by UAE-based market participants, they are not registered under the central bank’s payment token framework, leaving USDU as the only US dollar stablecoin that formally meets these criteria.

Reserve backing, banking partners and distribution

USDU is issued as an ERC-20 token on Ethereum and is positioned primarily for institutional and professional use. The stablecoin follows a conservative reserve model, with reserves fully backed one-for-one by US dollars held in safeguarded onshore accounts at Emirates NBD and Mashreq. Mbank serves as a strategic corporate banking partner, and a global accounting firm provides independent monthly attestations of the reserves.

Viitala said the banking partners are responsible for reserve custody and safeguarding, while the issuer remains accountable for fulfilling its obligations. “User confidence stems from the combination of regulated banking custody, recurring third-party attestations, and regulatory oversight,” he said.

Universal is also collaborating with AE Coin, a dirham-denominated stablecoin licensed by the UAE central bank, to enable future conversion between USDU and AE Coin for domestic settlement. In parallel, the company has appointed Aquanow, which is regulated by Dubai’s Virtual Assets Regulatory Authority, as its global distribution partner to expand institutional access and integrate USDU into regulated digital asset infrastructure, including settlement and on- and off-ramp use cases.

While USDU can be used for domestic settlement of digital assets and derivatives within the UAE, it is not authorized for general retail payments on the mainland, where dirham-based instruments remain the standard.

Sources:

https://www.adgm.com/public-registers/fsra/firms/financial-firms/universal-digital-intl-limited-250089

https://cointelegraph.com/news/uae-first-central-bank-registered-usd-stablecoin-launches