Swiss fintech developer X8 AG is making giant strides in the Islamic world after it received certification for an Ethereum-based stablecoin from the Shariyah Review Bureau, a Bahrain-based firm that advises companies on how to operate within Shari’a law. This is according to a report by Global Finance Magazine.
The report views this latest turn of events as a welcome development for crypto companies operating in the non-Islamic world as they would be able to benefit from the wider adoption of blockchain and cryptocurrencies within the region.
The now certified X8 currency is a stablecoin backed by a basket of eight currencies as well as gold. According to X8 director and co-founder Francesca Greco, this backing aims to ensure that the currency satisfies relevant Shari’a laws regarding the high volatility and speculation surrounding regular cryptocurrencies.
Cryptocurrencies could be haram
Even though the Middle East has taken to blockchain technology quite favorably, cryptocurrencies are still regarded as Haram (forbidden). Middle Eastern countries are guided by Shari’a law, which prioritizes real economic activity based on physical assets. The law also bans the payment of interest, yet another factor that would count against cryptocurrencies.
Thus, while the successful certification the new X8 currency may fuel hopes that blockchain development could gain widespread adoption in the Middle East, cryptocurrencies will still find it difficult to gain true acceptance within the Islamic world.