PUSD Expands into Middle East Digital Finance Sector
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A stablecoin linked to the U.S. dollar is making strides in the Middle Eastern market, particularly within the realm of Islamic finance. This innovative digital currency, known as PUSD, is now operating on a blockchain network based in the region, marking its entry into an institutional landscape supported by prominent financial entities in Abu Dhabi.
PUSD is issued by Palm Azgar Finance and distinguishes itself by maintaining reserves in Saudi riyals and UAE dirhams, both of which are pegged to the US dollar. This unique structure is fundamental to its compliance with Shariah law, aiming at institutions that adhere to Islamic financial principles which ban interest and emphasize asset backing.
With a circulating volume of approximately $2.3 billion, PUSD operates across several major blockchains including Ethereum, BNB Chain, Solana, and Tron. Its latest integration is the ADI Chain, which was specifically created as a settlement layer for a dirham-backed digital asset resulting from a collaboration between the International Holding Company and First Abu Dhabi Bank, and has received licensing from the Central Bank of the UAE.
The introduction of PUSD to this network allows institutions to process transactions using either a dollar-linked or dirham-denominated token, which operates seamlessly on the same platform. The ADI Foundation has articulated a vision for the network that includes facilitating payment channels throughout the Gulf region, as well as extending into parts of Africa and the broader Middle East.
Islamic finance represents a vast market, with assets estimated to exceed $3 trillion globally. This sector has primarily relied on conventional banking and investment funds that adhere to Shariah guidelines. However, blockchain solutions are beginning to carve their niche, although they have faced challenges in achieving widespread adoption.
According to Shariah law, financial products must not accrue interest, limit speculation, and need to be supported by tangible assets, which disqualifies many traditional cryptocurrency offerings. For a stablecoin like PUSD to be recognized under these guidelines, it must provide transparent reserves and eschew interest-bearing returns. Certification by a panel of qualified Islamic scholars is often a prerequisite for such products, although details regarding PUSD’s certification status remain unconfirmed.
By joining the ADI Chain, PUSD aims to cater to corporate treasuries, payment processors, and exchanges that seek compliant digital settlement solutions. The UAE has emerged as a prominent regulatory environment for stablecoins, with the Central Bank and Abu Dhabi Global Market implementing multiple frameworks for both dollar-pegged and dirham-linked tokens.
Additionally, high-profile global players such as Tether, Ripple USD, and Circle have received approvals to operate within the ADGM financial zone, placing PUSD amongst industry giants vying for institutional transaction flows in a dynamic financial hub. With its entry into this competitive space, PUSD hopes to significantly contribute to the ongoing evolution of Islamic finance in the digital age.
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