Abu Dhabi-based Universal Digital has launched USDU, the first US dollar‑backed stablecoin to be registered by the Central Bank of the United Arab Emirates (CBUAE) as a Foreign Payment Token under the Payment Token Services Regulation (PTSR), the company said.
According to a release shared with Cointelegraph, the registration makes Universal the UAE’s first Foreign Payment Token Issuer and creates a clear, regulated US dollar‑denominated settlement option for digital assets in the UAE.
Juha Viitala, a senior executive officer of Universal, told Cointelegraph that the PTSR had allowed a transition period for payment token issuers to become PTSR-compliant and that, among all the USD stablecoins, USDU was the first to obtain such registration.
USDU and the UAE’s payment token regime
Universal is regulated by Abu Dhabi Global Market’s Financial Services Regulatory Authority (FSRA) with permission to issue a fiat‑referenced token and is now simultaneously registered with the CBUAE for payment‑token activities.
Viitala said that this dual oversight imposed a “higher level of discipline across reserve custody, governance, disclosures, and operational controls,” and that, for institutions, that difference was material because “registration provides a clearer compliance pathway for certain regulated use cases.”
Regulated institutions, such as banks, brokers and licensed venues in the UAE, now have a central‑bank‑registered US dollar token they can plug into existing compliance, settlement and reporting workflows.
Under the PTSR, payments for digital assets and digital asset derivatives in the UAE may only be conducted in fiat or a Registered Foreign Payment Token.
While global stablecoins such as Tether’s USDt (USDT) and Circle’s USDC (USDC) are widely used by UAE‑based traders via exchanges and over-the-counter desks, they are not registered under the CBUAE’s payment token regime, meaning USDU is currently the only US dollar stablecoin that formally meets those requirements, Viitala explained.
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Reserve structure and banking partners
USDU is issued as an ERC‑20 token on Ethereum and is designed for institutional and professional use, with a conservative reserve structure and direct banking integration.
Reserves are fully backed 1:1 by US dollars held in safeguarded onshore accounts at Emirates NBD and Mashreq, with Mbank acting as a strategic corporate banking partner and a global accounting firm providing monthly independent attestations.
Viitala said that the banking partners provided reserve custody and safeguarding, while the issuer remained responsible for meeting its obligations.
“User confidence stems from the combination of regulated banking custody, recurring third-party attestations, and regulatory oversight,” he said.
Related: UAE’s dirham stablecoin race widens as RAKBank nets in-principle approval
Institutional distribution via Aquanow
The firm is also working with AE Coin, an Emirate dirham-denominated stablecoin licensed by the Central Bank of the UAE, to enable future conversion between USDU and AE Coin for domestic settlement, aligning US dollar and dirham payment tokens within the same regulatory perimeter.
Universal has appointed Aquanow, regulated under Dubai’s Virtual Assets Regulatory Authority (VARA), as its global distribution partner to expand institutional access to USDU and integrate it into regulated digital asset infrastructure, including on- and off‑ramp and settlement use cases.
While USDU can be used for UAE domestic payment of digital assets and derivatives, it is not permitted for general retail payments in the mainland, where dirham‑denominated instruments remain the standard.
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