Swiss financial technology company X8 AG has garnered certification from Islamic scholars for its cryptocurrency. The firm says it’s planning to extend its business into regions of the Middle East.
The Basics of the Certification
The certification is granted when a financial business is considered “Sharia-compliant.” Both financial exchanges and regulators are eager to expand monetary services in the Middle East as a means of boosting the economies of several countries – i.e. Syria, etc. – that have been harmed by civil war. In addition, officials are seeking to push financial innovation within the region.
As the globe has become more accepting of cryptocurrencies and blockchain technology, several countries in the Middle East are hoping to avoid being left behind and have begun examining the benefits and circumstances surrounding their usage. However, like many nations, the notions of money laundering, monetary crimes, and price volatility have aroused suspicion and worries amongst regulators, which has led to the involvement of Islamic scholars.
Upon observing a cryptocurrency business, if they feel that the company follows specific religious protocols, the scholars will grant the venture in question Sharia certification to suggest that the enterprise has what it takes to do business properly and keep its customers and their assets safe.
Who Makes This Decision?
X8 AG garnered its certification from the Shariyah Review Board (SRB), an Islamic advisory firm licensed by Bahrain’s Central Bank. X8 says it’s hoping its Ethereum-based cryptocurrency – which is presently backed by eight fiat currencies and gold – can provide Middle Easterners easy access to digital assets.
Director and co-founder Francesca Greco explained:
The Gulf region is a really good place for financial technology companies because they all want to become hubs for fintech.
The Middle East is Complacent Towards Crypto
She added that the company is looking for a spot to set up its new Middle East headquarters. Executives are also looking to build a Sharia-compliant cryptocurrency exchange. This has led to multiple discussions with exchanges in regions like Abu Dhabi, Bahrain, and Dubai.
Scholars have long debated over the viability of cryptocurrencies. These arguments have led to a multitude of differing opinions regarding how they fit into religious circles and assist present economic standards. Among Islamic scholars, however, the debates have seemingly thinned, as many compare transferring cryptocurrencies to transferring rights, which is deemed acceptable in the Islamic religion.
One of the most recent crypto-based ventures to become Sharia-compliant is Stellar, which earned its certification last July.
Are we likely to see more Sharia-compliant crypto businesses in the future? Post your thoughts and comments below!
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