Inside Tharwa: The UAE Stablecoin Replacing Dollar Reserves with Diversified Real-World Assets

\ Most stablecoins are backed by either fiat reserves or crypto assets, a model that's proven functional but fundamentally limited.

\ Tharwa is building something different: a stablecoin collateralized by a diversified portfolio of real-world assets, UAE real estate, gold, oil, treasury bills, managed by AI-driven rebalancing algorithms. It's an ambitious technical stack that attempts to solve the yield problem plaguing dollar-pegged stablecoins while maintaining stability through diversification rather than overcollateralization.

\ Saeed Al Fahim, founder of Tharwa and member of one of the UAE's most prominent business families, is building from Abu Dhabi, a jurisdiction rapidly becoming the global center for RWA tokenization and blockchain regulation.

\ In this conversation, we explore how diversified fund backing changes stablecoin economics, the engineering challenges of maintaining pegs with dynamic collateral, and why the UAE's regulatory framework might be the key advantage traditional finance needs to move on-chain.

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Ishan Pandey: Hi Saeed, welcome to our "Behind the Startup" series. You come from one of the UAE's most prominent business families with deep roots in traditional finance, real estate, and capital deployment. What made you decide to build a stablecoin protocol rather than staying within conventional financial structures, and what unique insights from traditional finance are you bringing to Tharwa?

\ Saeed Al Fahim: Coming from a traditional capital background actually made the limitations of conventional finance very clear to me. Traditional structures are efficient at scale, but they’re slow to innovate, capital-inefficient, and geographically constrained.

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\ What I’m bringing from traditional finance into Tharwa is discipline. Asset governance, risk committees, segregation of duties, capital preservation mandates, and long-term portfolio thinking. Tharwa isn’t built like a crypto experiment, it's built like an institutional treasury, just natively on-chain.

\ Ishan Pandey: The UAE has emerged as one of the most forward-thinking jurisdictions for RWA tokenization and blockchain regulation. How has operating from Abu Dhabi shaped Tharwa's strategy, and what structural advantages does the region offer that would be difficult to replicate elsewhere?

\ Saeed Al Fahim: Abu Dhabi shapes Tharwa less through regulation and more through mindset. This is a market built around long term capital, real assets, and sovereign scale thinking. When you operate from Abu Dhabi, you’re naturally designing for durability, not short-term cycles.

\ Being here gives us proximity to asset originators, infrastructure operators, and capital allocators who think in decades and are deeply embedded in real-world value creation—energy, real estate, commodities, and strategic reserves. That directly influences how we structure Tharwa’s backing and risk framework.

\ The ecosystem encourages disciplined deployment, conservative risk-taking, and alignment with national scale capital strategies. The combination of deep assets, patient capital, and global ambition is extremely hard to replicate anywhere else. \n

Ishan Pandey: Tharwa is tackling something most stablecoin projects avoid: diversified, multi-asset backing instead of single-asset reserves. Walk us through the thesis here, why is a blended portfolio of real estate, gold, oil, and treasury bills superior to the USDC model of pure dollar reserves, and what specific risk-return profile are you targeting?

\ Saeed Al Fahim: Single-asset reserve models like USDC optimize for simplicity, not resilience. They are effectively digital money market funds. Our thesis is different: long-term stability comes from diversification across uncorrelated, productive assets.

\ By blending real estate, gold, energy linked assets, and sovereign bills, we’re targeting capital preservation with controlled yield, not speculative upside. The goal is low volatility, strong downside protection, and sustainable real-world cash flows. Tharwa is designed to behave more like a sovereign-style reserve portfolio rather than a cash proxy.

\ Ishan Pandey: Here's the engineering challenge that fascinates me: stablecoins require predictable collateral ratios, but fund AUM fluctuates with market performance. How does Tharwa maintain the 1:1 USD peg when your underlying assets are actively managed and inherently dynamic? What mechanisms have you built to prevent portfolio volatility from affecting thUSD stability?

\ Saeed Al Fahim: The peg is protected at the protocol level, not the portfolio level. thUSD is always backed by excess collateral, with buffers that absorb portfolio mark-to-market fluctuations. Portfolio performance impacts treasury surplus, not token stability.

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\ Active management happens behind the peg, not against it. Stability is non-negotiable; optimization is secondary.

\ Ishan Pandey: Tharwa is integrating AI-driven portfolio rebalancing with CVaR optimization to manage risk. But algorithmic rebalancing in traditional finance operates within regulated exchanges and liquid markets. How does your AI engine handle illiquid RWAs like UAE real estate or oil extraction rights, where price discovery is slow and exit windows are narrow? What happens when the algorithm signals a rebalancing but the underlying assets can't be moved fast enough?

\ Saeed Al Fahim:  This is where AI is often misunderstood. Our AI engine doesn’t force liquidity, it manages exposure. For illiquid RWAs, rebalancing is done through allocation pacing, yield routing, and new capital deployment rather than forced exits.

\ When assets can’t move quickly, the system adapts by adjusting marginal flows, hedging exposure through liquid proxies, and slowing issuance rather than destabilizing the base. The objective isn’t speed, it's controlled adaptation. Illiquidity is a feature when managed correctly, not a flaw.

\ Ishan Pandey: Tharwa positions itself as both Shariah-compliant and globally accessible. Islamic finance principles around asset-backed instruments and prohibition of interest-based systems actually align well with RWA tokenization philosophies. How are you structuring thUSD's yield generation to satisfy both faith-aligned investors and conventional DeFi participants, and does this dual compatibility give you access to capital pools that other stablecoins can't reach?

\ Saeed Al Fahim: Yield at Tharwa is generated from asset productivity, not leverage or interest. That means rental income, commodity-linked returns, trade-backed cash flows, and structured profit-sharing. No lending at interest, no synthetic yield.

\ What’s powerful is that this structure is compatible with both faith-aligned investors and conventional DeFi users. One side values asset-backing and ethics,  the other values sustainable yield and transparency. That overlap unlocks capital pools that most stablecoins simply can’t access.

\ Ishan Pandey: You're at the intersection of AI-driven finance and blockchain infrastructure. Looking ahead 2-3 years, where do you see the convergence of AI and crypto taking the industry? What developments are you most excited about, and what risks do you think the market is underestimating?

\ Saeed Al Fahim: Over the next few years, AI will become the invisible operating layer of crypto risk engines, treasury management, and liquidity routing. Compliance automation will be AI-native. The biggest shift won’t be trading bots; it will be autonomous financial infrastructure.

\ The risk the market underestimates is governance. AI without strong, human-defined constraints can amplify errors at scale. Tharwa is built with the assumption that AI assists decision-making, but accountability remains human. That balance will define which protocols survive institutional adoption.

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:::tip This author is an independent contributor publishing via our business blogging program. HackerNoon has reviewed the report for quality, but the claims herein belong to the author. #DYO

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