A senior official of the Swiss-based cryptocurrency firm, X8 AG revealed on Monday that the company has been certified by the Islamic scholars and was ready to launch operations in the Middle East.
Based on Middle East’s contribution on the global GDP, the region proves to be a suitable market for cryptocurrencies. However, the Islamic religion, the dominating faith in the Middle East, is quite categorical on matters commerce.
Licensing crypto operators for Sharia law compliance
To ensure that cryptocurrency operators in the region adhere to Sharia laws on finance, the Islamic Scholars established certification criteria based on religious teachings.
Regulators within the Middle East have been friendly towards digital assets; nonetheless, concerns about cryptos high price volatility have been raised. To protect consumers from suffering huge losses arising from the wild price fluctuations, the region encourages consumers to trade in stable coins- cryptos backed by real assets or state institutions like the Federal bank.
Region encourages stable coins
X8 is one among the recommended stable coins “backed by a basket of eight fiat currencies and gold.” It is quite uncommon for the coin to endure price volatility unless; maybe the underlying asset backing the coin becomes unstable which is highly unlikely.
Speaking after receiving the certification, Francesca Greco, the Director and Co-founder of X8 stated that “The Gulf region is a really good place for financial technology companies, because they all want to become hubs for fintech.”
The executive reiterated the company’s plans to create a regional office in the Middle East and later launching a Sharia-compliant exchange platform.
Without the intervention of the Shariyah Review Bureau (SRB), an advisory board of Islamic scholars, Cryptocurrency business will be doomed in the Middle East. The scholars leverages on Quran’s teachings to license companies seeking to operate in the region.
According to the teachings of Muhammad, transfer of ownership rights on a property is permissible and cryptocurrency dealings are considered to fall under this kind of operation. The SRB reports to the Central Bank of Bahrain.