The UAE has officially stepped into the stablecoin race — and it’s doing it with a regulatory first.
On Thursday, Universal Digital Intl Limited launched USDU, the country’s first stablecoin approved directly by the Central Bank of the UAE. That approval gives USDU a clear edge over rivals like Circle’s USDC as competition in the region heats up.
USDU is now the only stablecoin officially recognized for fully compliant digital-asset settlement under UAE rules.
Why USDU stands out
Universal Digital is the first company registered directly with the UAE Central Bank to issue what’s known as a Foreign Payment Token. According to reports, that status allows USDU to be used for regulated digital-asset transactions in a way no other stablecoin currently can in the country.
The token is fully backed by U.S. dollars held at major UAE banks, including Emirates NBD, Mashreq, and Mbank. That backing, combined with central bank registration, puts USDU in a strong position with institutions that require strict regulatory compliance.
How this affects USDC
Circle, the company behind USDC, received a license from Abu Dhabi Global Market in December, allowing it to operate as a money services provider and expand payment services across the UAE and the wider Middle East.
But there’s a key difference.
That license does not include direct registration with the Central Bank. As a result, USDC can operate locally but does not have the same official settlement status as USDU — a gap that gives Universal Digital a regulatory advantage, especially when dealing with banks and large institutions.
Building the ecosystem
To support adoption, Universal Digital has partnered with Aquanow, a Dubai-based crypto infrastructure firm regulated by VARA. The partnership is designed to plug USDU into the broader digital-asset ecosystem and make it easier for platforms and institutions to integrate the stablecoin.
A bigger push by the UAE
The launch fits neatly into the UAE’s broader strategy to become a global crypto and digital finance hub. The country has been steadily tightening rules while encouraging innovation, aiming to attract serious players rather than speculative projects.
It also comes as institutional interest in stablecoins accelerates worldwide. Tether is preparing a U.S.-compliant stablecoin, and Fidelity recently launched its own token, FIDD, signaling that major financial firms are moving deeper into the space.
With USDU now live and backed by the Central Bank, the UAE isn’t just joining the stablecoin market — it’s setting the rules for how regulated digital money works inside the country.
