Stellar receives compliance certificate for Islamic finance
Stellar and its lumens cryptocoin have received approval from Islamic scholars for use in sharia-compliant financial products and ventures.
Islamic finance is a potentially huge and, as yet largely untapped, market for cryptocurrency and blockchain entrepreneurs as the fintech revolution stretches its tentacles into growth markets.
Stellar and lumens
The company announced in a blog post on Tuesday that the Shariyah Review Bureau, a compliance licensing arm of the Central Bank of Bahrain, granted Stellar the first sharia-compliance certification to a blockchain company. It also extended the certification to applications and usages of lumens.
“In partnership with SRB, this certification will help grow the Stellar ecosystem in regions where financial services require compliance with Islamic financing principles,” the company said on a blog post.
The move will allow Stellar to develop its distributed ledger ecosystem in Islamic financial institutions and use its lumens cryptocurrency in their payments systems.
Sharia financial laws prohibit usury – profiting from interest paid on loans – and investment in businesses that are considered contrary to Islamic principles.
The Shariyah Review Bureau stated that having conducted its review on the network’s guides, concepts and related material, “did not find any provisions that are non-congruent to the principles of Sharia”.
Stellar’s blog post concluded: “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.”