Universal is first out of the gate on foreign payment tokens: Abu Dhabi-based Universal Digital Intl has secured the UAE’s first license for a USD-denominated stablecoin, making it the first registered foreign payment token issuer under the Central Bank of the UAE with the launch of USDU, according to a press release. USDU is the only registered foreign payment token currently permitted for digital-asset settlement in the UAE.

A framework refresher: Under the CBUAE’s framework, only fiat or registered foreign payment tokens can be used for digital asset derivatives payments. With USDU the only token registered under the framework, it essentially sets up a compliant USD settlement rail for the UAE’s regulated digital asset market.

How USDU works: FRSA-regulated Universal will back USDU, which will be used for digital asset settlement and derivatives in the UAE — not general payments — by 1:1 reserves.

Who else is involved? The reserve funds are held in onshore accounts with our friends at Mashreq and Emirates NBD. Al Maryah Community Bank is also onboard as a banking partner and Universal partnered with Aquanow, a VARA-regulated digital-asset infrastructure provider, on adoption and distribution.

Integration with AE Coin is also in the cards, with work underway to allow users to convert between USDU and the UAE’s first AED-pegged stablecoin for domestic settlement.

IN CONTEXT- The move comes as stablecoins are being increasingly integrated into payments systems in the UAE, however for now, it is AED-backed tokens that are dominating the scene. Players like Network International, 7X, Air Arabia, the Abu Dhabi Judicial Department, and Tawasul Taxis are amongst those now accepting AE Coin as payment. IHC, ADQ, and First Abu Dhabi Bank are developing a regulated AED token, and Rakbank is developing an AED-backed stablecoin.

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