> For the complete documentation index, see [llms.txt](https://docs.universal.xyz/docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.universal.xyz/docs/introduction-to-universal/universal-protocol-overview/issuance.md).

# Issuance

Token issuance refers to the process of increasing the supply of Universal tokens in circulation through minting.

<div align="center" data-full-width="false"><figure><img src="https://2533779672-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FXh5fv5YSvLZEWa12x8W9%2Fuploads%2FLtSF3HAmfgEgc8wfhYhQ%2FScreen%20Shot%202024-06-19%20at%209.48.05%20AM.png?alt=media&amp;token=13e0fa1e-45e7-4fb6-a6eb-335110d7384b" alt=""><figcaption><p>Universal Token Issuance Flow</p></figcaption></figure></div>

The issuance process is **managed by the Universal network** but can only be **initiated by a Merchant**. Each token issued is **fully collateralized** by its respective underlying asset. Additionally, Universal tokens can only be minted to **whitelisted destination addresses** of authorized Merchants.

#### **Sequence of Events for uAsset Issuance:**

1. **Merchant Initiation:**\
   The Merchant initiates the issuance process by sending a transaction to the Universal token contract. This transaction **signals intent** to issue Universal tokens, backed by an equivalent amount of the underlying asset.
2. **Asset Transfer to Custodian:**
   * The Merchant specifies the **blockchain and recipient address** where they wish to receive the minted Universal tokens.
   * The Merchant **transfers the corresponding underlying assets** to the designated Custodian.
   * The deposited assets must match the exact value of the Universal tokens being requested for issuance.
3. **Verification and Minting:**
   * The Universal network **validates the received assets** to ensure they match the requested issuance amount.
   * Once successfully verified, the network **executes a minting transaction**, creating the specified number of Universal tokens.
   * The newly minted tokens are then sent to the **Merchant’s designated address** on their specified blockchain.