Switzerland-based fintech firm X8 AG has received a certification from the Shariyah Review Bureau for its ETH-based stablecoin.
SRB is a leading Sharia consultancy and audit firm licensed by the central bank of Bahrain. It reportedly has a presence in twelve countries, and holds the market share of over 13 percent of Saudi Investment Companies licensed by the country’s Capital Markets Authority (CMA), and over 21 percent of the Cooperative Insurance Firms Listed on the Saudi stock-exchange market.
The debate over whether or not cryptocurrencies are Sharia-compliant has centered on their compatibility with the Islamic prohibition on sheer monetary speculation. Reuters notes that some Islamic scholars have deemed crypto trading to be analogous with the “transfer of rights,” which is legitimate under Sharia law.
According to X8 director and co-founder, Francesca Greco, X8’s ETH-based crypto asset is a “stablecoin,” whose backing by a basket of seven fiat currencies and gold is considered to assuage Islamic advisors’ concerns over excessive volatility and speculation.
As part of its plans to expand its business to the Middle East, X8 reportedly plans to launch a crypto exchange that would include a Sharia-compliant trading platform. To this end, Greco told Reuters that the company has met with local exchanges in Abu Dhabi, Dubai, and Bahrain. “The Gulf region is a really good place for financial technology companies, because they all want to become hubs for fintech,” she added.
As reported this July, altcoin Stellar (XLM) received a Sharia compliance certification in the money transfer and asset tokenization field, claiming to be the first blockchain protocol to have done so. Other crypto companies claiming “firsts” in the sector include crypto utility token NOORCOIN, which was certified with a Sharia Certificate from the World Sharia Advisory Committee in March.
Bitcoin (BTC) was was recognized as “generally permissible” under Sharia law this April by an internal Sharia advisor to fintech startup Blossom Finance. Sharia advisor Muhammad Abu Bakar included a warning that while he considers digital currencies to be halal (permissible), in most cases traders should not purchase them for investment purposes.
Blossom Finance CEO and Founder Matthew J. Martin told Cointelegraph this February that as a payment network, Bitcoin may be even more halal than fiat currencies due to it being based on Proof-of-Work (PoW), rather than on debt.