PUSD, a Shariah-compliant stablecoin backed by Gulf currencies, is set to deploy 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 about $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 multiple blockchains, including Ethereum, BNB Chain, Solana, and Tron, with ADI Chain marking its latest integration. The stablecoin aims to provide access to Islamic finance markets, which represent more than $3 trillion in assets globally, as stated by the ADI Foundation.

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ADI Chain is the settlement layer for a dirham-backed stablecoin initiated by International Holding Company and First Abu Dhabi Bank, licensed by the Central Bank of the UAE.

PUSD’s introduction adds a second stablecoin to the network, enabling institutions to execute transactions with either a dollar-linked asset or a dirham-backed token within the same infrastructure.

Transactions on this network require its native token for fees and are anticipated to facilitate settlement across corridors linking the Gulf, the Middle East, and parts of Africa.

PUSD is issued by Palm Azgar Finance and specifically designed for institutional use by corporate treasuries, exchanges, and payment processors.

UAE Expands Stablecoin Framework

The United Arab Emirates has created a comprehensive regulatory structure for digital assets, with agencies like the Central Bank of the UAE and Abu Dhabi Global Market (ADGM) laying down regulations for stablecoins and virtual asset providers. Within this framework, dirham-pegged payment tokens are being explored as a method to enhance domestic payments and streamline cross-border transactions.

In December, UAE telecom giant e& entered into an agreement with Al Maryah Community Bank to test a dirham-pegged stablecoin licensed by the central bank for consumer payments across its digital platforms in an early-stage pilot.

Subsequently, RAKBank received preliminary approval from the central bank to issue a dirham-backed stablecoin, expected to be fully backed 1:1 by reserves held in regulated accounts, with the approval contingent on final regulatory and operational requirements.

The initiative has also expanded to include dollar-denominated tokens operating under local regulations. In January, Universal Digital launched USDU, a US dollar-backed stablecoin registered by the UAE central bank as the first dollar-denominated token approved for payment use within the regulatory framework.

Moreover, the Financial Services Regulatory Authority has granted approvals to several crypto firms, including Tether (USDT), Ripple USD, and Circle, to conduct operations in the ADGM’s financial zone.