Embargoed until January 29th at 10am (GST)
The Central Bank of the United Arab Emirates (CBUAE) has approved the country's first US dollar-denominated stablecoin under the bank's Payment Token Services Regulation (PTSR), according to a press release on Thursday.
The issuance and management of USDU tokens will be handled by Universal Digital, which is regulated by the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM).
The reserves backing USDU are held on a one-to-one basis with Mbank in secure domestic accounts with Universal's banking partners Emirates NBD and Mashreq.
This regulatory move means that USD stablecoins are now operational and operational under central bank payment regimes, putting the UAE ahead of the US, EU and many countries in Asia, the release said.
“USDU sets a new benchmark for regulated digital value,” said Juha Vitala, Universal's senior executive officer. “Being the first foreign payments token to be registered by the UAE Central Bank and backed by a major UAE bank provides financial institutions with much-needed clarity and confidence. This lays the foundation for a more transparent and efficient digital asset market within and outside the UAE.”
Universal said digital asset infrastructure company AquaNow has been appointed as its global distribution partner and will support institutional access to USDU outside the UAE, where permitted.
“We are seeing increasing institutional investor interest in regulated digital value products, and Universal's introduction of USDU is a timely step to help this market mature,” said Joel Van Dusen, Group Head of Corporate and Investment Banking at Mashreq.
