Stellar (XLM) Network and Token Declared Sharia-Certified
The Stellar Network and XLM token have been Sharia-certified by the SRB.
Stellar (XLM) has been declared as the first distributed ledger protocol (DLT) platform to be Sharia- compliant.
- Stellar network and the XLM token are sharia-certified
- Shariyah Review Bureau (SRB) certified the Stellar Network
- XLM price jumped on the news amid a wave of developments
- XLM can now develop the network in the Islamic law states
- 1.8 billion practice Islam globally (~25% of global population)
The open-source blockchain platform provides the technology for distributed money transfer, cross-border payments, and tokenization of assets.
According to a blog post published by Stellar on July 17, “the Sharia compliance certification extends to applications and usages of lumens (XLM).“
The certification ties in with the Stellar Development Foundation’s main mission, which is to continually promote access to financial services around the globe.
Other than that, the Foundation aims to promote the policy of inclusion.
Obtaining the Sharia compliance certification is one step of advancing inclusiveness and the market reach of Stellar’s technology and network. As per the Stellar Development Foundation (SDF):
By building public, open-source software, we aim to enable institutions to provide reliable and low-cost financial technologies to serve all geographies, ethnicities, wealth classes and religions.
Stellar Network Passes SRB Review
The Shariyah Review Bureau (SRB) conducted a review of the Stellar protocol, its properties, and applications. It thereafter undertook to formulate some guidance as well as guidelines that make it possible for the XLM technology to be used in Islamic institutions.
The SRB is a leading international Sharia advisory agency licensed by the Central Bank of Bahrain.
As part of the review, the SRB concluded that:
Stellar is just a network and technology. In and of itself, it is (lawful) as the legal maxim of the Islamic law states: Permissibility is the original state of things. Therefore, the network is Shariah compliant. It is the use of this tool and technology which needs to be considered for Shariah compliance.
According to the accompanying notes uploaded by Stellar, the certificate, (along with the attached Sharia guidelines), is issued by the advisory body “in its capacity as the Sharia Advisor of the Stellar network.”
Implications for Stellar (XLM)
The certification gives Stellar the green light to develop and enhance the use of its ecosystem in those regions that require strict compliance with principles governing Islamic financing.
This is great news for XLM, investors, and businesses and individuals subject to Sharia Law. Islam is the second largest religious group, the fastest growing religious group, and accounts for about 25% of the global population.
The certification means XLM is now compliant within the Gulf Cooperation Council countries that include:
- Saudi Arabia
It also applies to Southeast Asia countries like:
It certainly may end up as being a massive development for the Stellar network when considering that these countries are generally lack robust financial systems.
The region commands an important volume of remittances made by foreign workers. Capturing the market may be a big bonus for the network’s growth and adoption efforts around the world.
The Stellar Development Foundation has plans to meet global financial institutions in coming months. The aim is to map out the way forward on how to best apply the guidelines given in rolling out financial services and products that are Sharia-compliant.
Not the first Sharia-compliant Asset
Stellar would like to see itself as the first cryptocurrency platform to receive Sharia compliance approval, particularly in the field of money transfer. However, it’s not the absolute first within the industry.
A Sharia advisor with fintech start-up Blossom Finance indicated that under Islamic law, Bitcoin (BTC) could be regarded as being “generally permissible”.
Nevertheless, Muhammad Abu Bakar, who authored the report, cautioned against the use of cryptocurrency (Bitcoin) as investment assets but asserted that the digital assets is halal (permissible).
It was also revealed last month that IncuBlock, a South Korean blockchain lab finalized a MoU with an advisory committee for the Malaysian government on blockchain development. The aim is to work together at developing a blockchain-based platform that would be permissible under Sharia law.
Series of positive news
Stellar is having one of those months that have seen it bask in a series of positive news so far in July.
Stellar (XLM) Passes Litecoin (LTC)
Stellar surpassed Litecoin by market cap on Tuesday. Though not a major milestone, the recent rally that led XLM surpass Litecoin by market cap is still news for the community. XLM/USD soared by over 30%, rallying to a two-month high near $0.30.
Coinbase Announces it is Exploring Adding Stellar (XLM)
Just last week, Coinbase announced that it was exploring the possibility of adding five more coins to its trading platform. Other than Stellar, the others were Cardano, ZCash, Basic Attention Token, and 0X.
Although it’s not guaranteed that the five or XLM for that matter will be added, the announcement contributed to XLM’s price gain by over 10%. An upside in price was expected after such an announcement.
However, the real excitement comes from the possibility that XLM could be listed on Coinbase. The result would be an increased adoption rate for the crypto and an influx of institutional investors.
IBM Launches Stable Coin on Stellar Network
On Tuesday, IBM launched the Stronghold USD Stable Coin on the Stellar Network. The stable coin will be used to explore payment settlement and foreign exchange on the IBM blockchain. If the system succeeds, it’s likely to herald more adoption of the Stellar’s protocol.