Stellar has staked an early claim to fame with the news that it is now the first protocol leveraging digital ledger technology to obtain a Shari’a certification for both payments and asset tokenization.
The news comes on the back of a review from the Shariyah Review Bureau, which has now offered its certification establishing Stellar as compliant with Shari’a law.
The Stellar Development Foundation welcomes the news, stating that “In partnership with SRB, this certification will help grow the Stellar ecosystem in regions where financial services require compliance with Islamic financing principles. For example, 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.”
In a report, the Shariyah Review Bureau concluded that it “did not find any provisions that are non-congruent to the principles of Shari’a. However, the users of the Network seeking to attain Shari’a compliance should take note that merely following the attached guidelines does not automatically ensure compliance to Shari’a.”
The development is significant for the fact that the underlying volatility of cryptocurrency assets have been argued to be a form of usury – the action or practice of lending money at unreasonably high rates of interest – which is forbidden under Shari’a law.
The certification might well open many doors for Stellar in various territories. The United Arab Emirates (UAE), for example, has publicly declared its interest in blockchain technology in various guises – such as the Dubai-based emCash or the National Bank of Dubai’s blockchain-based check issuance systems.
In the wake of the news, Stellar Lumens is up by 22.18% day-on-day, and presently trades at $0.284897 USD.