Swiss Crypto Play X8 Obtains Sharia Compliance for Its Stablecoin

November 12, 2018 by Akshay Makadiya

 

Swiss cryptocurrency company X8 AG’s stablecoin, X8Currency (X8C), has become the latest digital asset to be judged by Islamic authorities as permissible with Islamic law, or sharia. The move will allow X8 AG to tap into jurisdictions that require compliance with Islamic financial doctrines.

Also read: What should I do With My Bitcoin Cash to Prepare for the Hard Fork?

 

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X8C: Basket-Pegged and Now Sharia-Compliant

The Shariyah Review Bureau, an advisory enterprise regulated by Bahrain’s central bank, has certified X8 AG’s X8C stablecoin as a sharia-compliant digital currency.

 

Unlike other stablecoins singularly pegged to an asset or a fiat currency, the Ethereum-based X8C token is underwritten by a “basket” comprised of gold and eight currencies, namely the euro, the pound sterling, the Japanese yen, the Swiss franc, and the U.S., Australian, Canadian, and New Zealand dollars.

Swiss multinational investment bank UBS will hold the associated fiat reserves and the world’s second-largest reinsurer, Swiss Reinsurance Company Ltd., will insure the funds.

X8C’s nine pegs are to be tracked and balanced in real time using an artificial intelligence software dubbed Automatic Reserve Management AI.

 

When In Rome …

The Shariyah Review Bureau’s judgment comes as X8 is presently moving toward launching its own office and cryptocurrency exchange in the Middle East.

On the latter front, the Swiss firm has already reportedly held talks with exchange enterprises in Bahrain and the United Arab Emirates.

“They all want to become hubs for fintech,” X8 co-founder and current director Francesca Greco commented of the nations of the Gulf region, which collectively saw growth declines in 2017 upon oil production slowdowns.

Whether these nations can become cryptocurrency will largely depend on which digital asset projects can obtain sharia compliance. That question stands as Islamic scholars from around the world and of different schools of thought debate the permissibility of cryptocurrencies.

Indeed, some Islamic scholars have completely rebuffed the concept of digital currencies, while others have found them not to contradict sharia’s property dictates. The yeasayers have emboldened more Islamic cryptocurrency melds. Earlier this year, for example, OneGram introduced a gold-backed cryptocurrency the play asserts is compliant with sharia.

Relatedly, in May 2018 the Ramadan Mosque in Dalston, East London, began accepting bitcoin donations after its leaders determined the cryptocurrency could be transacted in a “lawful manner.”

Will more cryptocurrencies become permissible under Islamic law? Share your views in the comments section.

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