PUSD, a Sharia-compliant stablecoin backed by Gulf currencies, is set to be deployed on ADI Chain, a layer 2 network focused on institutional settlement in the Middle East.
According to an announcement shared with Cointelegraph, the stablecoin has approximately $2.3 billion in circulation and is backed 1:1 by reserves held in Saudi Riyals and UAE Dirhams, which are pegged to the US dollar.
It is already available on several blockchains, including Ethereum, BNB Chain, Solana and Tron, with ADI Chain marking its latest integration. The stablecoin is positioned to provide access to Islamic finance markets, which represent more than $3 trillion in assets globally, according to the ADI Foundation announcement.
ADI Chain is the settlement layer for a dirham-backed stablecoin initiated by International Holding Company and First Abu Dhabi Bank and licensed by the Central Bank of the United Arab Emirates, according to the announcement.
The addition of PUSD introduces a second stablecoin to the network, allowing institutions to settle transactions using either a dollar-pegged asset or a dirham-denominated token on the same infrastructure.
Transactions on the network require its native token for fees and are expected to support settlement across corridors connecting the Gulf, Middle East and parts of Africa.
PUSD is issued by Palm Azgar Finance and is designed for institutional use, including corporate treasuries, exchanges and payment processors.
Related: Here’s why crypto is taking hold in Dubai and Abu Dhabi
UAE develops stablecoin framework
The UAE has developed a multi-tiered regulatory framework for digital assets, with authorities including the UAE Central Bank and the Abu Dhabi Global Market (ADGM). establish rules for stablecoins and virtual asset providers. In this context, payment tokens indexed to the dirham are being studied as a means of modernizing national payments and improving cross-border settlements.
In December, UAE telecommunications giant e& signed an agreement with Al Maryah Community Bank to test a stablecoin indexed to the dirham licensed by the UAE Central Bank for consumer payments on its digital platforms as part of an early-stage pilot.
The following month, RAKBank received approval in principle from the central bank to issue a dirham-backed stablecoin, with the planned token to be fully backed 1:1 by reserves held in regulated accounts. Approval is subject to final regulatory and operational conditions prior to any live broadcast.
This initiative also extended to dollar-denominated tokens operating under local rules. In January, Universal Digital launched USDUa US dollar-backed stablecoin registered by the UAE Central Bank under its Payment Token Services Regulation, making it the first dollar-denominated token approved for payment use under this framework.
Separately, the Financial Services Regulatory Authority has granted approvals to several crypto companies, including Tether (USDT), Dollar Ripple And Circleto operate within the ADGM financial zone.
