AE Coin and USD Universal are developing a regulated digital conversion framework to enable near-instant movement between dirham- and dollar-denominated payment tokens, marking a further step in the UAE’s push to build institutional-grade digital asset settlement infrastructure.The proposed framework will connect AE Coin, a dirham-pegged stablecoin licensed by the Central Bank of the UAE, with USDU, a US dollar-backed stablecoin issued by Universal Digital Intl Limited and regulated within Abu Dhabi Global Market. The arrangement is powered by Al Maryah Community Bank and is designed to support settlement in virtual asset markets, treasury operations, liquidity management and future trade finance applications.
The mechanism aims to reduce friction between local currency and dollar-based digital value, a problem that has become more pressing as regulated virtual asset activity expands across Abu Dhabi and Dubai. Initial access to the USDU–AE Coin conversion channel will be provided through Changer. ae, an FSRA-regulated digital asset custodian, and Aquanow, a VARA-licensed broker-dealer, placing custody, execution and banking functions inside the UAE’s supervisory perimeter.
For institutions, the significance lies less in the creation of another stablecoin pair and more in the attempt to build a compliant route between two regulated payment tokens. USDU is registered by the Central Bank of the UAE as a Foreign Payment Token under the Payment Token Services Regulation and is positioned for professional and institutional settlement linked to digital assets. AE Coin, meanwhile, is structured for dirham-denominated payments, with one AE Coin pegged to one dirham.
Juha Viitala, Senior Executive Officer of Universal Digital Intl Limited, said the future of digital finance in the UAE required “a secure, regulated bridge between local and global markets”. He said automating conversion between USDU and AE Coin would reduce friction and enable near-instant value exchange, supported by regulated providers including Changer and Aquanow.
The collaboration comes as stablecoins move from crypto trading venues into more formal payments and settlement architecture. Global banks, card networks and market infrastructure firms have been testing tokenised settlement to cut transaction times, widen operating hours and improve liquidity efficiency. The UAE has sought to distinguish its approach by placing activity under defined licensing regimes, including Abu Dhabi Global Market’s FSRA framework and Dubai’s Virtual Assets Regulatory Authority.
USDU’s structure gives the dollar leg of the framework a supervised base. Universal says each token is backed one-for-one by liquid US dollar reserves held with regulated UAE banks, with monthly independent reserve attestations. Emirates NBD and Mashreq are named as reserve banking partners, while Al Maryah Community Bank acts as a corporate banking partner. The token is issued as an ERC-20 asset on Ethereum and is built for institutional workflows, including trading, collateral movement and on-chain settlement.
AE Coin’s role is different but complementary. Its function is to provide dirham-linked settlement inside the UAE, including wallet-based domestic payment use cases. Al Maryah Community Bank’s AEC Wallet allows users to buy, transfer, receive, hold and sell AE Coin, while broader pilots and merchant integrations have pointed to possible applications in retail payments, utilities and public-facing services.
The new conversion framework could also become relevant for cross-border trade. The partners plan to explore links with fintech platforms specialising in trade finance and multi-currency settlement, potentially giving UAE-based institutions a regulated bridge between dollar liquidity and dirham payment needs. That could appeal to brokerages, custodians, exchanges, market-makers and treasury desks that handle both local obligations and international settlement flows.
Regulatory limits remain central to the framework. USDU is not positioned as a general-purpose domestic retail payment instrument for mainland dirham transactions. Its permitted use is tied to payment and settlement activity connected with virtual assets and virtual asset derivatives under the Central Bank’s payment token regime. AE Coin carries the domestic currency function, while USDU provides the dollar settlement layer.
The UAE’s stablecoin market is becoming more competitive. Alongside AE Coin and USDU, other players have pursued dirham-linked or dollar-linked token projects, reflecting demand for regulated digital money in a jurisdiction that is trying to attract virtual asset companies while preserving banking and payments oversight. Tether has previously announced plans for a dirham-pegged stablecoin with local partners, while banks and payments companies have been exploring tokenised settlement and blockchain-based payment rails.
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