Crypto exchange Bybit has announced the launch of new products that are compliant with Shariah, or Islamic law, specifically designed to meet the needs of Muslim investors.
On Sept. 24, Bybit co-founder and CEO Ben Zhou announced on X that the trading platform launched a Crypto Islamic account. This includes access to spot trading of Shariah-compliant tokens, a dollar-cost averaging (DCA) bot and a spot grid bot.
Source: Ben Zhou
According to Bybit, its Islamic account adheres to the religion’s principles, allowing investors to trade “without compromising” their faith. The exchange said the products are developed in consultation with the Malaysia-based company Zico Shariah, an advisory firm specializing in Islamic law.
How crypto assets can comply with Islamic law
The Islamic finance system is based on the guiding principles of “Shariah” or Islamic law. 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 the loss and profit-sharing agreements between borrowers and lenders. Here, borrowers and lenders share investment risks, profits and losses.
Products and services in Islamic finance. Source: Cointelegraph
The law allows investments in goods such as stocks, bonds and digital assets such as 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, a supervisory board must review and certify the tokens before Muslim investors can start buying them. The certification process often involves reviewing the tokens’ features and design comprehensively.
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Bybit secures Dubai license
The introduction of the new Shariah-compliant product coincides with Bybit obtaining a license in the United Arab Emirates, a nation where Islam is the official religion.
On Sept. 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.
The provisional license 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.
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