Tharwa Finance has unveiled its latest approach to stablecoins, aiming to address structural inefficiencies in existing digital dollar assets and enhance their suitability for institutional use. The company’s founder and CEO, Saeed Al Fahim, emphasized that current leading stablecoins, such as USDT and USDC, rely on passive cash reserves, which he says limits capital productivity and prevents holders from earning returns on their assets.
According to Al Fahim, billions of dollars in static collateral are tied up as backup for these tokens, generating yield for issuers and custodians but little benefit for end users. He argued that this model is incompatible with the demands of modern global finance, where capital is typically actively managed to produce risk-adjusted returns.
Tharwa Launches thUSD To Address Capital Efficiency In Stablecoins
Tharwa Finance’s flagship stablecoin, thUSD, is designed to address this perceived “capital efficiency” problem. Unlike traditional stablecoins, thUSD is backed by a diversified portfolio of real-world assets, including corporate debt and government securities, which are actively managed using proprietary AI models. The token is structured to operate similarly to a share in an actively managed fund, aiming to deliver institutional-grade yield while maintaining a stable US dollar peg.
In addition to its asset structure, thUSD is developed within a Shariah-compliant framework, positioning it to attract institutional liquidity from the Middle East and Africa. The protocol is designed for regulatory compliance and seamless integration with existing financial infrastructure, reflecting the project’s focus on institutional adoption rather than purely retail use.
Tharwa’s approach aligns with broader trends in digital finance, including the rise of real-world assets on blockchain, the demand for yield-bearing stablecoins, and the evolving role of stablecoins as core infrastructure for cross-border payments, tokenized securities, and institutional decentralized finance. Al Fahim highlighted that the UAE, with its supportive regulatory environment and institutional connections, provides a strategic base for the development of thUSD.
Stablecoins 2.0, as described by Tharwa, represents a shift from passive reserve-backed tokens to actively productive digital assets capable of supporting global commerce and financial services. The model aims to provide faster, lower-cost transactions, continuous access to financial instruments, and opportunities for yield generation across both retail and institutional markets.
Al Fahim stressed that the evolution of stablecoins is central to integrating blockchain into traditional financial systems, enabling more efficient capital deployment and broader economic participation. He maintained that digital assets should serve both institutional and individual users, supporting financial inclusion while enhancing the efficiency of global finance.
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Source: Mpost.io
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