UAE unveils first central bank–approved stablecoin, challenging USDC on home turf

The UAE has officially entered the stablecoin race. Universal Digital Intl Limited on Thursday launched USDU, the country’s first central bank–approved stablecoin, giving it a regulatory edge over Circle’s USDC as competition heats up in the region.

Registered directly with the Central Bank of the UAE, Universal Digital is the first issuer authorized to roll out a Foreign Payment Token, according to The Block. USDU is fully backed by U.S. dollars held at major UAE banks including Emirates NBD, Mashreq, and Mbank, positioning it as the only stablecoin with official status for settling digital-asset transactions under UAE rules.

Circle, the issuer of USDC, received a license from Abu Dhabi Global Market in December to operate as a money services provider and expand payments across the UAE and Middle East.

But that license stops short of central bank registration, meaning USDC can operate locally without enjoying the same settlement status as USDU—a distinction that gives Universal a clear regulatory advantage for institutions requiring full compliance.

Universal has partnered with Aquanow, a Dubai VARA-regulated crypto infrastructure provider, to plug USDU into the broader digital-asset ecosystem.

The launch aligns with the UAE’s broader push to establish itself as a global crypto hub and comes as institutional interest in stablecoins accelerates, following moves by Tether to introduce a U.S.-compliant stablecoin and Fidelity’s launch of its FIDD token.