Tharwa Finance Introduces thUSD Stablecoin To Boost Capital Efficiency And Institutional Adoption
In Brief
Tharwa Finance has launched thUSD, a Shariah-compliant, actively managed stablecoin designed to improve capital efficiency, generate institutional-grade yield, and support broader adoption of digital assets in global finance.
If you’re intent on reinventing stablecoins into a vehicle that makes institutions perpetually productive, you’d probably benefit from having a strong background in financial and economic matters. And that’s precisely what Tharwa Finance founder Saeed Al Fahim possesses in spades. Hailing from one of the United Arab Emirates’ elite business families, and with a strong background in enterprise technology, he quickly saw the critical flaw in the design of today’s stablecoin assets.
The idea of digital dollars that enable frictionless commerce is enormously appealing, and Al Fahim is one of the biggest enthusiasts. Yet, he sees a massive, systemic defect in leading assets such as USDT and USDC: capital inefficiency.
Al Fahim believes the design of existing stablecoins makes them totally unsuitable for global finance at scale. Tokens like USDT and USDC are backed by passive reserves – billions of dollars in cash or cash equivalents that sit idle in their issuer’s bank accounts, and it creates a critical imbalance. While this capital generates significant yield for a handful of fat stablecoin issuers and custodians, those who actually hold and use the tokens don’t get anything from it. For Al Fahim, that just doesn’t sit right.
Al Fahim argues that the industry has been conditioned to accept stability in digital finance at the expense of productivity, a trade-off he considers unacceptable in the modern era.
According to Al Fahim, the billions of dollars locked up as collateral is wasted as a static backup mechanism. He believes it’s a massive opportunity to accelerate adoption of stablecoins. “We cannot afford to ignore this if we want digital assets to displace traditional fiat as the backbone of the global economy,” he insisted.
He maintains that this inefficiency cannot be ignored if digital assets are to meaningfully displace traditional fiat as the backbone of the global economy. His aim is to tackle what he sees as the “capital efficiency” problem of today’s stablecoins. Currently, the two top digital dollar assets are backed by more than $250 billion in static reserves, and this represents an enormous, underutilized pool of capital. Al Fahim points out that it has no parallel in traditional finance, where institutional capital is never passive, but always actively managed across diversified portfolios to consistently generate risk-adjusted returns.
At the core of his thesis is the belief that digital dollars should actively work for their holders rather than remain idle. He describes the current model as a financial paradox in which reserves generate yield for intermediaries while delivering nothing to the millions of people and businesses actually using stablecoins. In his view, this is not true innovation but structural inefficiency, and the equation must be redesigned so digital assets become meaningfully productive.
Rethinking the stablecoin model
That’s what Tharwa Finance and its flagship token thUSD, a dollar-pegged stablecoin that represents a fundamental evolution in digital asset infrastructure, is all about. Al Fahim describes thUSD as the world’s first AI-assisted, real-world asset-backed stablecoin infrastructure, and says it’s designed specifically for capital efficiency and institutional-grade yield generation.
thUSD is unique because of the way it merges the capital efficiency of a managed fund with the reliability of diversified RWAs and the sophistication of AI-powered portfolio management in a single package that’s ethical, compliant and ready for institutional adoption. It’s more than just a new protocol – it’s a paradigm shift in what stablecoins are.
Al Fahim explains that the stablecoin of the future cannot remain a simple digital IOU; it must evolve into an intelligent vehicle of value. With thUSD, he says, Tharwa is shifting from a passive, reserve-backed structure to an active, managed-portfolio model. The token is designed to function like a share in an algorithmic fund, aiming to deliver institutional-grade predictability and yield while preserving the stability and interoperability that define stablecoins.
Al Fahim said thUSD’s architecture has five key differentiators that set it apart from traditional stablecoin assets. First, because it functions like a share in a managed fund, token holders essentially own a piece of the underlying, actively-managed asset portfolio. Second, rather than use static bank deposits as collateral, it’s backed by a diversified portfolio of RWAs, including high-quality and low-volatility assets such as corporate debt, treasury bonds and other institutional financial instruments. Third, Tharwa’s proprietary AI models ensure that these assets are actively monitored and optimized. Al Fahim notes that Tharwa’s proprietary models dynamically manage the asset mix, with the objective of optimizing risk-adjusted returns while safeguarding thUSD’s peg to the U.S. dollar.
Fourth, and perhaps the most intriguing aspect of thUSD, is that it’s built within a “Shariah-aligned” framework. Al Fahim said this will open the asset up to a massive, previously untapped source of institutional liquidity across the Middle East and Africa, and ultimately the broader Islamic finance ecosystem. Fifth, thUSD’s underlying protocol was designed to be institutionally-friendly. To that end, it’s fully compliant with global regulatory standards and can easily be integrated into existing financial rails.
For Al Fahim, institutional readiness extends far beyond maintaining a stable peg. It requires full regulatory compliance and seamless interoperability with existing financial infrastructure. He emphasizes that thUSD is being built as an institutionally native asset rather than one that is merely institutionally tolerated.
Aligning with market trends
Tharwa’s approach connects to three of the most significant and disruptive macrotrends that are actively shaping the future of digital finance.
The first is the rise of RWAs, which is driven by a growing demand from institutions for traditional, revenue-generating assets to be brought on-chain. Advocates of RWAs believe that they’ll ultimately become the standard way to own and trade everything from stocks and shares to commodities, bonds and real estate. When this happens, stablecoins are the obvious tool for settling RWA transactions. But they need to be much more sophisticated, Al Fahim stressed. The most obvious solution is to leverage RWAs as collateral, enabling thUSD to bridge the chasm between on-chain liquidity and off-chain yield, he said.
Another trend is the move towards yield-bearing stablecoins, which signals that the market is ready to reject the existing passive-reserve model. Al Fahim said tokens such as USDT and USDC are useful tools for retail investors to quickly move into and out of positions, but institutional users demand more. They want their capital to maintain its purchasing power and simultaneously generate returns.
Finally, stablecoins are evolving into “capital markets infrastructure,” Al Fahim mused. They’re no longer seen as tools for crypto trading. Increasingly, they’re being used for cross-border payments, tokenized securities and institutional DeFi. Given that evolution, it makes sense for the underlying asset to be just as productive as the application layer.
Capitalizing on these trends isn’t the only thing thUSD has going for it. It also has the advantage of being localized in the UAE. Al Fahim, as the scion of one of Abu Dhabi’s most prominent and respected business families, has deep connections within the local economy and its banking ecosystem, which gives Tharwa and thUSD a valuable head start. The UAE has aggressively positioned itself as a global hub for crypto and digital finance, introducing sweeping regulations that have attracted institutions looking for clarity and robust compliance.
Al Fahim stresses that Tharwa’s decision to build in the UAE was deliberate and strategic, not incidental. He views the region as uniquely supportive of the convergence between traditional finance and digital assets, with both regulatory clarity and institutional appetite aligned around that vision.
Stablecoins 2.0, and the promise of a better world
After founding Tharwa last year and laying out his thesis, Al Fahim has become part of a new generation of innovators designing what’s known as “Stablecoins 2.0.” It’s a new phase that marks the metamorphosis of digital assets from passive tools into sophisticated financial instruments.
Stablecoins 2.0 will finally realize one of crypto’s most painfully clichéd concepts – bridging crypto with traditional finance. It’s an idea that’s been repeated so often that people have lost sight of what it actually means, Al Fahim said.
Al Fahim envisions a financial system in which global commerce, cross-border remittances and institutional treasury management operate on perpetually productive capital, with assets continuously working for their owners. In his view, this is the true meaning of Stablecoins 2.0 and the future of finance.
When blockchain is fully integrated into global markets, it will fundamentally restructure how cross-border value transfer operates, bringing benefits to normal people as well as big businesses and institutional investors, Al Fahim promised. Among other things, it will enable faster, lower-cost transactions, 24/7 access to finance, the ability to store value and hedge against inflation and greater access to passive income-generating opportunities for everybody.
Al Fahim has long supported crypto, particularly its promise of advancing financial inclusion. He believes digital assets should enhance the financial well-being of individuals as much as institutions, and he is convinced that the convergence of traditional finance and blockchain will unlock broader economic opportunity — a conviction that continues to drive his work with Tharwa.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
