ADI Chain integration brings PUSD stablecoin to $3T Islamic finance sector
A stablecoin compliant with Shariah law and supported by currencies from Gulf states launches on Layer 2 infrastructure designed for Middle Eastern institutional transactions.
A Shariah-compliant digital currency known as PUSD, which draws its backing from Gulf region currencies, is preparing to launch on ADI Chain, a specialized Layer 2 blockchain platform designed to facilitate institutional settlement operations throughout the Middle East region.
As detailed in an announcement provided to Cointelegraph, the digital currency currently maintains approximately $2.3 billion in active circulation and enjoys full 1:1 backing through reserve holdings denominated in Saudi riyals and UAE dirhams, both of which maintain pegs to the US dollar.
The stablecoin has already established presence across several blockchain networks, including Ethereum, BNB Chain, Solana and Tron, with the ADI Chain deployment representing its most recent expansion. The digital asset is strategically designed to facilitate entry into Islamic finance markets, which collectively account for over $3 trillion in global assets, as stated in the announcement issued by the ADI Foundation.
The ADI Chain platform serves as the settlement infrastructure for a dirham-pegged stablecoin that was launched through collaboration between International Holding Company and First Abu Dhabi Bank and operates under licensing from the Central Bank of the UAE, the announcement confirms.
With PUSD now joining the ecosystem, the network gains a second stablecoin option, enabling institutional participants to process settlements through either a dollar-linked digital asset or a dirham-based token using identical underlying infrastructure.
Network operations require payment of fees in its native token and are designed to facilitate settlement activities across transaction corridors that connect the Gulf region, broader Middle East territories and selected African markets.
Palm Azgar Finance serves as the issuing entity for PUSD, and the stablecoin has been specifically engineered for institutional applications, encompassing use by corporate treasuries, cryptocurrency exchanges and payment processing services.
UAE builds out stablecoin framework
The United Arab Emirates has constructed a comprehensive multi-tier regulatory structure governing digital assets, with regulatory bodies such as the Central Bank of the UAE and Abu Dhabi Global Market (ADGM) implementing guidelines for stablecoins and virtual asset service providers. Operating within this regulatory structure, dirham-backed payment tokens are under investigation as a mechanism to enhance domestic payment systems and streamline cross-border transaction settlement.
Last December, telecommunications provider e&, one of the UAE's largest, entered into an agreement with Al Maryah Community Bank to conduct testing of a dirham-pegged stablecoin authorized by the UAE central bank for consumer payment applications across its digital service platforms in a preliminary phase pilot program.
The subsequent month saw RAKBank obtain provisional approval from the central bank to launch a dirham-backed stablecoin, with the proposed token designed to maintain complete 1:1 backing through reserves maintained in regulated account structures. The provisional approval remains contingent upon satisfaction of final regulatory requirements and operational criteria prior to any official issuance.
The regulatory initiative has additionally extended to encompass dollar-denominated tokens functioning under domestic regulations. This past January witnessed Universal Digital introducing USDU, a stablecoin backed by US dollar reserves and registered with the UAE central bank pursuant to its Payment Token Services Regulation, establishing it as the inaugural dollar-denominated token to receive approval for payment functionality within the regulatory framework.
In a parallel development, the Financial Services Regulatory Authority has issued operational approvals to multiple cryptocurrency enterprises, including Tether (USDT), Ripple USD and Circle, authorizing their operations within the ADGM's designated financial zone.