UAE Approves USDU as First Compliant Dollar Stablecoin for Settlement

What Did Universal Digital Launch?

Universal Digital Intl Limited has launched USDU, a U.S. dollar-backed stablecoin that it says is the first to be registered and permitted for compliant digital-asset settlement in the United Arab Emirates. According to the company, USDU is now registered under the UAE’s Payment Token Services Regulation after Universal became the first Foreign Payment Token Issuer approved by the Central Bank of the UAE.

The registration places USDU within the country’s formal payment and settlement framework at a time when UAE authorities are tightening rules around how digital-asset and derivatives transactions are settled. Under local regulations, such activity must be settled either in fiat currency or through an approved foreign payment token, a category Universal says USDU now occupies.

Universal framed the launch as part of the UAE’s broader effort to build a regulated digital-asset environment, with USDU positioned as a dollar-denominated settlement tool designed to meet institutional compliance requirements rather than retail speculation.

Investor Takeaway

How Is USDU Backed and Structured?

Universal said USDU is backed on a one-to-one basis with U.S. dollar reserves held at established financial institutions, including Emirates NBD, Mbank, and Mashreq. The company did not disclose the custody structure in detail but stated that reserves are maintained within the regulated banking system.

The backing arrangement mirrors standard stablecoin designs used for payment and settlement rather than yield generation. By emphasizing reserve custody at recognizable regional banks, Universal appears to be targeting users that require assurance around asset segregation and local regulatory oversight.

In a statement, Universal Senior Executive Officer Juha Viitala described the approval as a turning point for institutional users. “USDU sets a new benchmark for regulated digital value,” he said. “Being the first Foreign Payment Token registered by the UAE Central Bank gives institutions the clarity and confidence they have been waiting for.”

Why Does UAE Approval Matter for Stablecoins?

The UAE has taken a more prescriptive approach to digital assets than many jurisdictions, tying usage directly to licensing and settlement rules. Rather than allowing stablecoins to circulate informally, regulators have linked their use to specific legal categories, including foreign payment tokens.

That framework reflects concerns around settlement finality, counterparty risk, and oversight of cross-border flows. For firms operating in or through the UAE, access to a locally approved dollar stablecoin can reduce uncertainty around compliance, particularly for derivatives trading and institutional transfers.

Universal said it has partnered with Aquanow, a firm regulated under Dubai’s Virtual Assets Regulatory Authority, to integrate USDU into existing digital-asset infrastructure. The company indicated that Aquanow’s network of regulated service providers would support distribution and usage, though no specific rollout timeline was provided.

Investor Takeaway

How Does This Compare With Other Stablecoin Moves in the UAE?

Universal’s launch comes as other major stablecoin issuers are also deepening their presence in the region. In December, Circle secured a financial services permission from the Abu Dhabi Global Market’s Financial Services Regulatory Authority, allowing it to operate as a money services provider.

Circle has said it plans to expand regulated payment and settlement services across the UAE and the wider Middle East and Africa region, focusing on dollar stablecoins and onchain payment infrastructure. USDC remains the world’s second-largest stablecoin by market capitalization.

Taken together, these developments point to a competitive but tightly regulated stablecoin environment in the UAE. Rather than competing purely on scale, issuers are increasingly competing on regulatory standing, settlement eligibility, and acceptance within institutional workflows.

What Comes Next for USDU?

Universal has not disclosed issuance volumes or early adoption metrics for USDU. The immediate test will be whether exchanges, brokers, and institutional traders adopt the token for settlement in line with local rules.

If usage develops as intended, USDU could become part of a broader effort to anchor digital-asset settlement in approved payment instruments rather than relying on offshore stablecoins. That approach aligns with the UAE’s wider strategy of bringing digital finance under defined supervisory frameworks while still supporting market activity.