Stellar, the seventh largest cryptocurrencies network has been certified by the Sharia and hence become the first and foremost digital ledger technology (DLT) protocol for payments and asset tokenization.
The Stellar Development Foundation is licensed from Central Bank of Bahrain and have a full-fledged right to operate an international Sharia consulting practice, this will help them to get partnered with all the Islamic financial institutions among the Middle East and Southeast Asia.
The foundation has announced that Sharia Review Bureau has certified Stellar for circulating the monetary transfers and also to tokenize the real world asset.
The announcement stated as:
“In partnership with SRB, this certification will help grow the Stellar eco-system in regions where financial services require compliance with Islamic financial institutions in the Gulf Collaboration 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.”
The SRB framed a 16-page document to justify the certification by mentioning all the applications of cryptocurrencies published by the non-profit Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI).
The SRB reported:
“Based on provided information, SRB conducted its review on the Network’s guides, concepts and related material and did not find any provision that are non-congruent to the principles of Sharia’s However, the users of the Network seeking to attain Shari’s compliance should take note that merely following the attached guidelines does not automatically ensure compliance to Sharia.”
Cryptocurrency has always been a debatable topic among Islamic scholars, they always raise the question that if asset class makes the trading tantamount and different which is forbidden by Sharia Law in any case.
But let me make you clear that according to the report Islamic Scholar, Abu Bakar warned that digital currency is a halal (permissible) and investment by the Islamic traders should not be allowed.
Stellar is planning to discuss its strategies with global financial institution resulting to make it more advance and worldwide popular. This announcement made by Stellar is no doubt a big achievement.