Bybit, one of the leading crypto exchanges, has announced the launch of new Shariah-compliant products specifically designed for Muslim investors.
How crypto assets can comply with Islamic law
The Islamic finance system is based on the guiding principles of Shariah. One of its rules prohibits paying or charging interest on loans, emphasizing equitable and ethical financial transactions. Instead of interest, Islamic finance is based on loss and profit-sharing agreements between borrowers and lenders. Here, borrowers and lenders share investment risks, profits, and losses. The law allows investments in goods like stocks, bonds, and digital assets like crypto. However, these cryptocurrencies should comply with the principles of Islamic finance. To be compliant, crypto assets must be based on a profit-and-loss sharing system. This means that investors will share in the business's profits and losses rather than receive a fixed return on investment. Once issued, tokens must be reviewed and certified by a supervisory board before Muslim investors can start buying them.
Bybit secures Dubai license
The introduction of the new Shariah-compliant product coincides with Bybit obtaining a license in the UAE, a nation where Islam is the official religion. On September 16, the exchange acquired a provisional license in Dubai, an emirate in the UAE. The Virtual Asset Regulatory Authority (VARA), Dubai’s crypto regulator, awarded Bybit a non-operational license two years after it set up a headquarters in the emirate. A provisional license like such will become active after the crypto exchange fulfills certain requirements set by VARA. Bybit’s chief operating officer, Helen Liu, said Dubai’s location, policies, and environment offer many opportunities for crypto businesses and investors.
The launch of Bybit's new Shariah-compliant products and the acquisition of a license in Dubai indicate the company's interest in serving Muslim investors and strengthening its presence in the Middle Eastern market.
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