Stellar cryptocurrency network, the seventh-largest in the world, announced on July 17, 2018 its success on becoming the first open-source platform for digital payments (DLT) protocol to obtain Sharia compliance certification for payments and asset tokenization. Their goal is to ease collaboration with Middle East and South East Asian financial firms.
Now Stellar can use its technology in Islamic Financial institution because it is approved by the Shariyah Review Bureau (SRB), a prominent international Sharia advisory agency licensed by the Central Bank of Bahrain. After scrutinizing the abilities of Stellar applications and its properties the bureau has announced regulation that allows the deployment of Stellar technology and certified Stellar as a Sharia-compliant vehicle for running monetary transfers and tokenizing real-world assets.
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.”
This attempt will open up the bandwagon for Islamic financial institutions positioned in the Gulf Cooperation Council as well as in the Islamic states of Indonesia and Malaysia to apply Stellar technology to their Sharia-compliant product and service subscriptions. Financial services require compliance with Islamic financing principles and with this collaboration of Stellar it becomes easy to conceptualize and implement applications and use-cases for Lumens (XLM), that has a market cap of $5.33B with a 24 hour volume of $90.59M, Stellar’s local crypto. 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.
However, the partnerships with Islamic financial institutions were not clearly declared, Stellar only released proposals 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.”
Surprisingly, NOORCOIN crypto is also claiming itself as “the first sharia-compliant utility token,” reportedly approved in March by the World Sharia Advisory Committee before Stellar received approval from the Shariyah Review Bureau in July as the “first approved distributed ledger protocol in the area of money transfers by Shariyah Review Bureau (SRB).”