UAE Central Bank approves first foreign payment stablecoin by Universal

Universal Digital Intl Limited (“Universal”), regulated by the Financial Services Regulatory Authority (“FSRA”) of Abu Dhabi Global Market (“ADGM”) in UAE, has issued both a fiat reference token that can cater to professional clients, as well as a foreign payment token issuer with the Central Bank of the UAE.

The fully USD backed stablecoin USDU, the registered foreign payment token, can be used for domestic payment for digital assets and digital assets derivates. Ofcourse USDU cannot be used for UAE domestic payments as the UAE Central Bank only considers AED backed stablecoins as legal currencies.

Unlike Circle’s USDC which has been accepted in ADGM, and is used only as a fiat reference token that professional clients can utilize, the USDU is open for the general public across the UAE. This was something that Tether had been seeking to do since it applied for a license two years ago.

Under the UAE Central Bank PTSR, payments for digital assets and digital-asset derivatives in the UAE may only be conducted in fiat or a Registered Foreign Payment Token, making the availability of a registered token essential for compliant operations.

With USDU currently the first and only token registered under this framework, it provides a clear, compliant settlement option for the UAE digital-asset market. This effectively establishes the UAE’s first clear USD stablecoin pathway for compliant settlement of digital assets, a structure many global markets are still in the process of defining.

Beyond the UAE, USDU is built to connect with international digital asset markets, enabling institutions to move regulated digital value across global platforms where permitted by local regulation.

Universal partners with UAE Banks and AECoin

Universal already has strong relationships with Emirates NBD, Mashreq, and Mbank, underscoring the institutional-grade backbone behind USDU. As such reserves backing USDU are held 1:1 in safeguarded onshore accounts at Emirates NBD and Mashreq, with Mbank supporting Universal as a strategic corporate banking partner.

“USDU sets a new benchmark for regulated digital value,” said Juha Viitala, SEO of Universal. “Being the first Foreign Payment Token registered by the UAE Central Bank – and supported by leading UAE banks – gives institutions the clarity and confidence they have been waiting for. It lays the groundwork for a more transparent and efficient digital-asset market in the UAE and beyond.”

Anith Daniel, Group Head of Transaction Banking Services, Emirates NBD, said: “We are pleased to support Universal’s introduction of USDU to the UAE’s financial services ecosystem. We continue to support solutions that bolster the nation’s rapidly developing, well-regulated digital-asset infrastructure in line with our vision to be a digital leader in the region.”

Reserves are independently attested each month by a global accounting firm. This level of transparency mirrors the emerging global standards seen in regulated regimes such as those in the EU, Japan, and select U.S. frameworks. Universal is also collaborating with AECoin, the first licensed AED stablecoin in the UAE, to enable future USDU–AECoin conversion for domestic settlement.

Universal partnering with Aquanow for crypto exchange and trading

Universal’s go-to-market strategy includes a partnership with Aquanow, a global infrastructure provider serving leading institutions across multiple markets. In the UAE, Aquanow is regulated under the Dubai’s Virtual Assets Regulatory Authority (“VARA”). This collaboration positions USDU for compliant uptake in the UAE and rapid integration into the broader digital-asset ecosystem through Aquanow’s established network of regulated service providers.

“Universal’s introduction of USDU underscores the continued maturation of regulated digital settlement assets. Aquanow’s platform is built to support this evolution by providing institutions with secure, compliant market access, and we are pleased to support the distribution of USDU,” said Phil Sham, CEO, Aquanow.

S&P Global UAE stablecoin report sheds light on what this could mean for UAE Banking infrastructure

The announcement comes weeks after S&P Global report discussed how stablecoins are evolving in the UAE and gave insights into the stablecoin regulation within the country.

The report first made a clear distinction between AED back stablecoins which can be issued by banks, financial institutions, exchange houses, and monetary intermediaries. These include of course MBANK’s AE Coin for example. These also can include bank deposits held in a separate escrow account at an unrelated bank licensed in the UAE if the stablecoin issuer is a licensed nonbank financial institution. If the issuer is a wholly-owned subsidiary of a bank, up to 50% of the assets can be invested in UAE government bonds and the Central Bank of the UAE’s (CBUAE’s) monetary bills, provided their average maturity is below six months.

AED stablecoin issuers are required however to segregate reserve assets from the stablecoin issuer’s other assets and a monthly audit by an external auditor. It also requires stablecoin issuers to hold at least UAE dirham (AED) 15 million in initial capital, plus additional capital of at least 0.5% of outstanding payment tokens. This increases to 2% if the issuer is a wholly-owned subsidiary of a bank.

S&P Global also noted that the UAE Central Bank restricts the use of foreign payment tokens issued by entities that are not incorporated in the UAE or a UAE financial free zone as a means of payment, except when purchasing virtual assets or virtual asset derivatives. This means that stablecoin holders cannot use foreign payment tokens to buy goods (excluding virtual assets) and services locally. They also cannot get paid interest or any other benefits to the length of time a payment token is held.

The report also explained that since the PTSR became effective in 2024, the CBUAE approved the AE Coin as the country’s first fully-licensed, AED-backed stablecoin. AEC Wallet, which is sponsored by Al Maryah Community Bank (MBank), facilitates the use of AE Coin. As of January 2026, AE Coin has been integrated into Network International’s point of sale and e-commerce platforms, allowing merchants across the UAE to accept it for domestic transactions. In April 2025, the UAE’s largest bank, First Abu Dhabi Bank (FAB), together with ADQ and International Holding Company (IHC), announced their plan to launch a regulated AED-backed stablecoin. In November 2025, the CBUAE allowed digital bank Zand to launch the first AED-backed stablecoin, Zand AE, on public blockchains. In January 2026, RAKBANK secured initial approval from the CBUAE to issue an AED-backed stablecoin.

S&P Global in their report believe that the AED-denominated stablecoins will play an increasingly important role in the national payment system. Accordingly they add that the regulation helps mitigate potential funding risks for banks. For example, under a scenario of widespread stablecoin adoption, the potential displacement of deposits is partially offset by the requirement for stablecoin issuers to hold reserves with banks. S&P Global believes this could exacerbate deposit concentration risk, either by concentrating deposits among a small number of issuers or by increasing the share of wholesale deposits in banks’ funding profile.

Since stablecoins are not allowed to pay interest, they are less attractive as saving instruments, which could limit adoption. However the report notes that by contrast, foreign payment tokens, which can be used to acquire virtual assets or generate revenues from decentralized finance protocols, could encourage bank customers to move funds out of bank deposits in search of higher returns. Yet S&P Global do not view this as a systemic risk, yet.

Globally, the UAE’s regulatory approach broadly aligns with leading frameworks, such as the EU’s markets in crypto-assets regulation and the U.S. GENIUS Act. Under all these regulations, stablecoins are fully backed by reserves, assets are kept separate from other funds, issuers are licensed, and strong supervision is in place.