Stellar Becomes First Crypto Protocol to Obtain Sharia Certification


Stellar, the seventh-largest cryptocurrency network, has become the first digital ledger technology (DLT) protocol to obtain Sharia certification for payments and asset tokenization.

The Stellar Development Foundation announced on Tuesday that, following a review of the technology’s properties and applications, the Shariyah Review Bureau (SRB) had certified Stellar as a Sharia-compliant vehicle for conducting monetary transfers and tokenizing real-world assets.

According to the foundation, this certification from SRB — which is licensed by the Central Bank of Bahrain and operates an international Sharia consulting practice — will enable Stellar to forge partnerships with Islamic financial institutions throughout the Middle East and Southeast Asia.

From the announcement:

“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.”

The SRB laid out its justification for awarding Stellar a Sharia certification in a 16-page document, which measured the cryptocurrency and its applications against standards published by the non-profit Accounting and Auditing Organizations for Islamic Financial Institutions (AAOIFI).

The SRB concluded:

“Based on provided information, SRB conducted its review on the Network’s guides, concepts and related material and 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.”

Cryptocurrency has long been a topic of debate among Islamic scholars, as some have questioned whether the asset class’ pervasive price volatility makes trading tantamount to usury, which is forbidden under Sharia law.

Earlier this year, however, Islamic scholar Mufti Muhammad Abu Bakar, a Sharia compliance officer at Jakarta-based investment firm Blossom Finance, published a paper arguing that bitcoin is Halal (permitted) for investors since it is recognized as a legal currency in some countries and widely accepted for payment in others.

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World's First Bank-Backed Crypto Exchange Finally Opens to the Public

The world’s first bank-backed cryptocurrency exchange is now open to the public after months of delays.

Japanese financial giant SBI Holdings formally launched its in-house crypto trading platform, dubbed VCTRADE, last month. Yet, as reported by CoinDesk at the time, the trading service was only available for a group of selected users who pre-registered with the platform last October.

In an announcement released on Tuesday, SBI Holdings said the service is now fully open for users aged from 20–70 who reside in Japan. However, a registration service for corporate customers has not yet been made available.

At its June launch, VCTRADE announced it will initially support trading of Japanese yen against XRP, the native token of the Ripple protocol – a move that aligns with the institution’s wider support for XRP in cross-border blockchain settlement.

Subsequently, the platform added yen-based trading pairs for bitcoin cash and bitcoin on June 8 and 15, respectively.

Today’s public launch comes nearly two years after SBI Holdings first announced it would build the exchange in October 2016, with the platform receiving an operating license from Japan’s financial watchdog, the Financial Services Agency, late last year.

Its debut was delayed for months, however, as the firm worked to raise levels of internal security following a massive $533 million hack at the country’s Coincheck exchange in January.

Open sign image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Hong Kong Monetary Authority to Launch Multi-Bank Blockchain Trade Finance Platform

Hong Kong’s de facto central bank will launch its own blockchain trade finance solution with 21 banks in August, Financial Times (FT) reported Sunday, July 15.

The joint venture between the Hong Kong Monetary Authority and Chinese company Ping An Group’s fintech subsidiary OneConnect aims to substantially reduce paperwork, costs security risks for participants, FT reports.

A major aim of the 21-party scheme is to reduce the amount of time and bureaucracy involved in signing up new fledgling businesses to banking services by smoothing over transactions.  

Using blockchain, “some” transactions will process in just one day against up to fourteen days using current methods, as FT reports.

Originally announced in November 2017, the move marks the first example of a regulator “bringing banks together” to improve trade finance, as Ping An deputy chief executive Jessica Tan described it. As Cointelegraph reported in May, a previous trade finance deal from HSBC was a smaller-scale affair, involving an individual bank.

“Instead of individual banks trying to do this you have the regulator trying to bring the banks together,” Tan told FT.

Ping An has already developed blockchain-powered solutions for the Chinese domestic market, and hopes the same technology will see success over the border, according to FT. The company, China’s second-biggest insurer with assets worth 4.7 tln yuan ($704 bln), joined the distributed ledger technology-focussed R3 Consortium in 2016.

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Kodak-Branded Crypto Miner-for-Rent Scheme Fizzles Out

A Kodak-branded Bitcoin (BTC) miner rental scheme will not go ahead as planned, the company’s licensee Spotlite told the BBC July 16.

Spotlite USA is one of many firms that licenses the Kodak brand to put on its own products, such as Kodak LED Lighting. Spotlite USA presented the Kodak-labelled KashMiner on Kodak’s official stand at the CES technology show in Las Vegas in January.

According to Spotlite’s plans, the mining equipment was originally intended to be rented out, with an up-front fee of about $3,400. Customers could then keep a share of mined cryptocurrency. According to Spotlite, the initial fee of $3,400 would result in $375 per month over two years through mining Bitcoin.

While Spotlite’s chief executive Halston Mikail had announced plans to install units at Kodak’s Rochester, New York headquarters, Kodak told BBC that the scheme was never officially licensed.

“While you saw units at CES from our licensee Spotlite, the KashMiner is not a Kodak brand licensed product. Units were not installed at our headquarters.”

The rental scheme was criticized by many as a scam that misled customers about promised profits. Economist Saifedean Ammous said, “There is no way your magical Kodak miner will make the same $375 every month.” Many critics also suggested that the scheme did not take into account the fact that Bitcoin mining is becoming more complicated.

Mikail told the BBC that the U.S. Securities and Exchange Commission (SEC) prevented Spotlite from moving ahead with the miner rental plan. He added that the firm will now privately deploy its mining equipment in Iceland, instead of offering it for rent.

On Jan. 9, Kodak announced plans to launch its own cryptocurrency on the KodakOne platform. KodakOne will allow photographers to register their work, license photographs, and search the internet for unauthorized usage. On Jan. 30, just a day before the initial coin offering (ICO) was set to start, Kodak delayed the launch of the new cryptocurrency, citing the need to evaluate the status of potential investors.

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