Stellar, a blockchain platform developed in the US, has earned a Sharia compliance certification from Islamic scholars in Bahrain—a sign that cryptocurrencies and their potential applications are slowly gaining traction in the Middle East.
Stellar earned the certificate from the Shariyah Review Bureau (SRB), an international Sharia advisory agency licensed by Bahrain’s central bank.
The certification covers Stellar’s blockchain and its associated cryptocurrency Lumens. According to Coin Market Cap, Stellar is the sixth largest cryptocurrency by market capitalization. In a blog post, Steller says it’s the first blockchain platform to receive a Sharia compliance certification in the money transfer and asset tokenization space.
Launched in 2014 by a non-profit based in Silicon Valley, Stellar is an open-source blockchain platform designed for distributed payments, making it a candidate to facilitate remittances, among other things. The platform has attracted notice recently because IBM is launching its own cryptocurrency atop Stellar’s public network.
With Sharia approval in hand, Stellar is now looking to link up its technology with Islamic financial products and services. The organization believes that SRB’s seal of approval will facilitate opportunities to work with Islamic financial institutions in the GCC and parts of Southeast Asia. It reports that it will pursue meetings with Islamic financial institutions in the next few months. “This is a big advancement for the Stellar network given that these regions are endpoints of popular foreign worker remittance corridors,” reads the blog post.
Although regulators and governments in the Middle East have expressed skepticism towards cryptocurrencies—most notably Bitcoin trading—Stellar’s Islamic finance certification is evidence that regional attitudes towards the space are changing.
In February 2018, the Saudi Arabian Monetary Authority signed an agreement with the US-based blockchain company Ripple to help participating banks in the kingdom use its enterprise software to instantly facilitate cross-border payments. More recently, the Abu Dhabi Global Market introduced a cryptocurrency regulatory framework in late June.