Stellar Development Foundation, the body that develops the Stellar Lumens (XLM) cryptocurrency, has received Sharia compliance certification in Bahrain, the foundation announced on Tuesday. The authorization, which covers money transfers and asset tokenization services, was issued by Shariyah Review Board (SRB), an international Sharia advisory agency licensed by the Central Bank of Bahrain.
SRB conducted a review of Stellar network and products, including the usage of XLM. Users of Stellar must ensure their own compliance with Islamic financial principles.
“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,” the certificate stated.
“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. This is because the investment usage and their respective assumptions and input, as well as the provisions marking the documents must be reviewed and certified by qualified Shari'a Advisors.”
The SRB Sharia license meets the Islamic financial requirements that are in force in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arabic Emirates, and in parts of Southeast Asia (e.g., Indonesia and Malaysia), according to Stellar Development Foundation.
The certificate has several provisions. For example, Shariah guidelines on trading XLM and other currencies on the Stellar network include rules on the possession, purchase, selling, and exchange of cryptocurrencies, or the promise to trade digital coins.
Stellar was found by Jed McCaleb and Joyce Kim in July 2014. The San Francisco-based project wants to be a decentralized peer-to-peer network. Stellar was initially based on Ripple's protocol, but in 2016 an updated version of the protocol with a new algorithm was implemented. The currency circulating inside Stellar's Network is called Lumen. XLM is the seventh largest cryptocurrency, with more than $4.3 billion market capitalization.
Recently, Stellar acquired Chain Blockchain Platform for $500 Million.