Universal Digital has introduced USDU, marking it as the first US dollar-backed stablecoin recognized by the Central Bank of the United Arab Emirates (CBUAE) under the Payment Token Services Regulation (PTSR). This development positions Universal as the inaugural Foreign Payment Token Issuer in the UAE, facilitating a regulated option for digital asset settlements in US dollars.
According to Juha Viitala, a senior executive at Universal, the PTSR framework provided a transition period for payment token issuers, allowing USDU to achieve registration ahead of other USD stablecoins. The UAE's payment token regime mandates that digital asset transactions can only occur in fiat or a Registered Foreign Payment Token, making USDU the sole US dollar stablecoin compliant with these regulations.
With oversight from both the Abu Dhabi Global Market’s Financial Services Regulatory Authority (FSRA) and the CBUAE, USDU adheres to stringent requirements regarding reserve custody, governance, and operational controls. This dual regulatory framework enhances compliance pathways for regulated entities, including banks and licensed brokers, enabling them to incorporate USDU into their existing settlement and reporting systems.
Issued as an ERC-20 token on Ethereum, USDU is designed primarily for institutional usage, ensuring that reserves are fully backed 1:1 by US dollars held securely.