X8 AG is a new Switzerland-based fintech firm, and they recently decided to pursue a path in cryptocurrency with an Ethereum-based stablecoin. They recently obtained certification from the Shariyah Review Bureau (SRB), according to a report on November 12th from Reuters U.K.
There are multiple firms like SRB that are working to move into the Middle East, requiring them to adhere to the Sharia finance regulations. The goal is to bring in new business with these platforms, while promoting innovative strides. As such, the religious validity of the digital asset industry is being examined more carefully by Islamic scholars. So far, the concern that many scholars appear to share is the price volatility of the market, as well as the types of assets that support the tokens.
Hopefully, with the new cryptocurrency being integrated into the community, there’s a possibility of silencing those concern. X8 AG is already “backed by a basket of eight fiat currencies and gold,” according to the report from Reuters.
Francesca Greco, the director, and co-founder for X8, said,
“The Gulf region is a really good place for financial technology companies, because they all want to become hubs for fintech.” She added that the firm would be setting up a new office this month, making it easier to perform their role. Luckily, the regulators have been incredibly welcoming for the fintech industry, giving them an easy opportunity to get involved.
Even with their fintech support, the regulators are still apprehensive and careful about the cryptocurrency industry, though the use of a stablecoin can help reduce some of the price volatility. As this token is prepared for launch, there should be a new cryptocurrency exchange integrated as well, which would be compliant with the Sharia regulations required of them. So far, Greco noted that they have spoken with the local exchanges that are currently functioning in Abu Dhabi, Dubai, and Bahrain.
Cryptocurrency had a point of contention among many jurisdictions. Considering how the area is trying to integrate religious principles into the assets, much of the concern has to do with how they comply with principles that “emphasize real economic activity and forbid outright monetary speculation.
Right now, the SRB is the ruling authority on these matters, and it is licensed by the central bank of Bahrain. It is a Sharia consultancy and audit firm.