UAE central bank approves first dollar-backed stablecoin, USDU, for payments

The token is fully backed 1:1 by U.S. dollar reserves and is the first stablecoin authorized to operate under the country’s central bank payment regime

UAE central bank approves launch of dollar-backed stablecoin USDU

29.01.2026 - 08:50

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2 min

Key points:

USDU is the first USD stablecoin approved by the UAE Central Bank.
Reserves are held 1:1 in accounts at major domestic banks.
The stablecoin is authorized for official settlement use.

The Central Bank of the United Arab Emirates has approved the launch of the country’s first dollar-denominated stablecoin, USDU, under the Payment Token Services Regulation framework. The token has already entered circulation and can be used for settlements involving digital assets within a regulated environment.

USDU is issued by Universal Digital, which is registered as a foreign payment token provider. Issuance and reserve management are conducted under the supervision of UAE regulators.

How the model works

USDU is fully backed by U.S. dollars on a 1:1 basis. Reserves are held in safeguarded accounts at Emirates NBD, Mashreq and Mbank. This structure meets regulatory requirements for settlement digital assets and enables the stablecoin’s use in institutional transactions.

Under current UAE rules, transactions involving digital assets and derivatives must be conducted either in fiat currency or via registered payment tokens — a category that now includes USDU.

Infrastructure and access

Infrastructure firm Aquanow has been appointed as USDU’s global distributor. The company will provide institutional access to the stablecoin outside the UAE in jurisdictions where such activity is permitted by law.

Universal Digital said the launch of USDU lays the groundwork for scaling regulated onchain settlements and expanding payment infrastructure for digital assets.

In November 2025, the UAE conducted its first government transaction using the digital dirham as part of a national CBDC pilot. The payment was processed on the mBridge platform in under two minutes.

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