The seventh-largest cryptocurrency by market cap, Stellar, gained global traction as a unique, decentralized value exchange protocol. Announced July 17, 2018, Stellar is the first cryptocurrency to receive Sharia compliance certification and integrate with Middle Eastern financial firms.
Sharia Compliance, Middle East Welcomes Cryptocurrency
Through its open-source network, Stellar aims to provide global access to basic value exchange services. On July 17, the Stellar network and technology announced that they are now permitted to service financial institutions that require compliance with Islamic financing principles.
After reviewing their application, the Shariyah Review Bureau approved financial applications of Stellar – marking a milestone in their mission to achieve global financial access. The Shariyah Review Bureau is a leading international Sharia advisory agency licensed by the Central Bank of Bahrain.
Through its recently obtained Sharia certification, the Stellar distributed ledger technology (DLT) protocol is the first to gain access to the money transfer and asset tokenization space within countries in the Middle East and Southeast Asia.
According to the official press release:
“Islamic financial institutions in the Gulf Cooperation Council (i.e. Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, UAE) and parts of Southeast Asia (e.g. Indonesia and Malaysia) will now be able to integrate Stellar technology in their Sharia-compliant product and service offerings. This is a big advancement for the Stellar network given that these regions are endpoints of popular foreign worker remittance corridors.”
The Sharia certification extends to applications and use-cases for Lumens (XLM), Stellar’s native cryptocurrency. By using lumens, users in the Middle East and Southeast Asia will have access to more affordable payment remittance channels when sending money across borders.
Although partnerships with Islamic financial institutions were not mentioned, Stellar released plans to enter the Middle East and offer its low-cost financial services to a diverse client base abroad.
“In the next few months, members of the Stellar Development Foundation will meet with global financial institutions and engage them on how to best utilize Stellar in their Sharia-compliant financial services and products. We’re excited to add even greater diversity and inclusion into the Stellar ecosystem.”
Cover Photo by Florian Wehde on Unsplash