UAE launches its first central bank–approved stablecoin, setting up a homegrown rival to USDC
The UAE has taken a major step into stablecoin territory. Universal Digital Intl Limited on Thursday launched USDU, the country’s first stablecoin registered directly with the Central Bank of the UAE — giving it a regulatory edge over offshore competitors and marking the first authorized issuance of a “Foreign Payment Token” under UAE rules, The Block reports.
USDU is fully backed 1:1 by U.S. dollars held at major local banks — including Emirates NBD, Mashreq and Mbank — and is positioned as the only stablecoin with explicit official status for settling digital-asset transactions in the UAE. That settlement standing could make USDU especially attractive to institutions that need clear central-bank-level compliance for treasury, payments and custody workflows.
Circle’s USDC is already active in the region: the issuer received a license from Abu Dhabi Global Market (ADGM) in December to operate as a money services provider and expand payments across the UAE and broader Middle East. But that ADGM license does not equate to direct central bank registration. In practice, USDC can operate locally, yet it doesn’t enjoy the same formal settlement status that USDU now holds — a key regulatory distinction for some institutional players.
To integrate into the local crypto stack, Universal Digital has partnered with Aquanow, a Dubai infrastructure provider regulated by VARA, which will help plug USDU into trading, custody and payments rails across the emirates. The move aligns with the UAE’s broader strategy to cement itself as a global crypto hub by building domestic infrastructure and attracting institutional flows.
The launch comes amid a broader wave of institutional stablecoin activity: Tether has been working on a U.S.-compliant product and Fidelity rolled out its FIDD token, underscoring growing demand for regulated dollar-pegged instruments. With central-bank approval and bank custody backing, USDU could become the default settlement token for regulated entities operating in the UAE — and a test case for how national-level stablecoins compete with established global issuers.
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