The PUSD stablecoin, which adheres to Shariah law and is backed by Gulf currencies, is set to launch on the ADI Chain, a Layer 2 network designed for institutional settlements in the Middle East.
As per an announcement shared with Cointelegraph, PUSD currently circulates approximately $2.3 billion and is backed 1:1 by reserves in Saudi riyals and UAE dirhams, both of which are pegged to the US dollar. This deployment on ADI Chain marks the latest addition to its existing presence across multiple blockchains, including Ethereum, BNB Chain, Solana, and Tron.
Strategic Expansion into Islamic Finance
The integration of PUSD on ADI Chain is strategically aimed at tapping into the Islamic finance market, which boasts over $3 trillion in assets globally, according to the ADI Foundation’s announcement. ADI Chain serves as the settlement layer for a dirham-backed stablecoin initiated by International Holding Company and First Abu Dhabi Bank, with licensing from the Central Bank of the UAE.
Enhancing Transaction Flexibility
The introduction of PUSD adds a second stablecoin option to the ADI Chain network, enabling institutions to settle transactions using either a dollar-linked asset or a dirham-denominated token. This flexibility is expected to enhance transaction efficiency across various corridors linking the Gulf, the Middle East, and parts of Africa.
Regulatory Context in the UAE
The United Arab Emirates has been actively developing a comprehensive regulatory framework for digital assets. Authorities, including the Central Bank of the UAE and Abu Dhabi Global Market (ADGM), have established guidelines for stablecoins and virtual asset providers. This framework aims to modernize domestic payments and improve cross-border settlement through dirham-pegged payment tokens.
Recent initiatives include an agreement between UAE telecom giant e& and Al Maryah Community Bank to pilot a dirham-pegged stablecoin for consumer payments, as well as RAKBank receiving in-principle approval from the central bank to issue a dirham-backed stablecoin, contingent on final regulatory conditions.
Broader Implications for Stablecoins
The push for stablecoins in the UAE is not limited to dirham-pegged tokens. In January, Universal Digital launched USDU, a US dollar-backed stablecoin registered under the UAE central bank’s Payment Token Services Regulation, marking it as the first dollar-denominated token approved for payment use within this framework. Additionally, the Financial Services Regulatory Authority has granted approvals to several crypto firms, including Tether (USDT), Ripple USD, and Circle, to operate within the ADGM’s financial zone.
This article was produced by NeonPulse.today using human and AI-assisted editorial processes, based on publicly available information. Content may be edited for clarity and style.
