First USD-backed stablecoin of United Arab Emirates has been approved by Central Bank of the UAE

First USD-backed stablecoin of United Arab Emirates has been approved by Central Bank of the UAE

¨     First USD-backed stablecoin of United Arab Emirates has been approved by Central Bank of the UAE.

¨     This is a key step in the regulation of digital assets and payment tokens in the UAE.

¨     The approved stablecoin is called USDU. It has been cleared under the Payment Token Services Regulation of the central bank.

¨     USDU is issued and administered by Universal Digital.

¨     Universal Digital is a crypto firm regulated by the Financial Services Regulatory Authority of the Abu Dhabi Global Market.

¨     The company is the first foreign payment token issuer registered with the UAE Central Bank.

¨     The approval places the UAE among leading financial centres adopting regulated digital payment frameworks.

¨     Universal Digital described the launch as a major milestone for regulated digital infrastructure.

¨     Stablecoins are a category of cryptocurrency designed to hold a steady value. Stablecoins operate on blockchain-based systems.

¨     They are typically linked to reserve assets such as fiat currencies.

¨     The US dollar is the most common reference currency for stablecoins.

¨     Stablecoins are less volatile than traditional cryptocurrencies and are suitable for payments and settlements.