California-based Stellar has received certification from the Shariyah Review Board, which allows it to integrate blockchain technology into Shariah-compliant financial products. Thus, the company is expanding its activities into the growing markets of the Middle East and Southeast Asia.
The certification covers the Stellar blockchain and its native currency Lumens (XLM), the seventh-largest cryptocurrency with a market capitalization of $5.3 billion.
Last year, the Stellar Development Foundation began exploring partnerships with financial companies in the Gulf region. The result was the receipt of a Shariyah Review Board license confirming compliance with Sharia law of the Stellar product. This will help the company gain a foothold in a region with a huge market that requires considerable resources.
Stellar is a platform that connects banks, payment systems and people, allowing you to quickly and reliably transfer money with minimal costs, it is a platform for fast and convenient exchange of not only cryptocurrencies, but also fiat money. Therefore, Stellar's interests extend primarily to the money transfer market, including the United Arab Emirates, Saudi Arabia and Bahrain.
The Shariah Review Bureau (SRB) is the world's leading Shariah advisor. Its service offerings cover a wide range of complementary disciplines that include product certification, consulting, Sharia audit and stock screening. The Assistant General Manager of the Bureau noted that there was no problem with blockchain technology, the main thing that SRB needed to consider was the use of the underlying cryptocurrency. Despite the Islamic Development Bank's official recognition of blockchain technology's compliance with the laws and fundamental principles of Shariah, some companies are still wary of the high volatility of the crypto asset market and the speculative nature of digital currencies.
A positive assessment from the SRB could therefore help narrow the debate, as it compared trading Lumens (XLM) to the transfer of rights, which is considered permissible in Islam.
The SRB also set rules for trading assets other than Lumens, including requirements to ensure price accuracy, constructive ownership and timely settlement - while being allowed to verify transactions on the blockchain.
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