Bybit, a leading player in the cryptocurrency exchange market, has unveiled new offerings tailored to align with Shariah principles, aiming to cater to the unique needs of Muslim investors.
On September 24, Ben Zhou, co-founder and CEO of Bybit, made a significant announcement via X (formerly Twitter) about the launch of a dedicated Crypto Islamic account. This specialized account features access to spot trading of Shariah-compliant tokens and includes innovative tools like a dollar-cost averaging (DCA) bot and a spot grid bot, designed to automate and optimize trading strategies in compliance with Islamic law.
Compliance with Islamic Principles
Bybit’s introduction of these Shariah-compliant products does not merely expand its market reach; it also ensures that Muslim investors can engage in cryptocurrency trading without compromising their religious principles. The exchange has developed these products in consultation with Zico Shariah, a Malaysia-based advisory firm expert in Islamic law, ensuring that every offered service adheres strictly to the ethical requirements set forth by Shariah.
Understanding Shariah Compliance in Crypto Assets
The principles of Islamic finance, which prohibit interest on loans and emphasize ethical financial practices, are central to the design of Bybit’s new offerings. Here’s a breakdown of how these principles apply to crypto assets:
- Prohibition of Interest: Shariah law prohibits the payment or receipt of interest, advocating for risk-sharing and profit-sharing financial arrangements.
- Profit and Loss Sharing: Instead of traditional interest-bearing accounts, Islamic finance favors agreements where both profits and losses are shared, promoting fairness and joint risk management.
- Investment in Permissible Assets: Investments are allowed in permissible goods like stocks, bonds, and digital assets, provided they adhere to Shariah principles.
- Certification Process: Any crypto asset offered must be reviewed and certified by a supervisory board, ensuring compliance with Islamic financial principles before it can be traded by Muslim investors.
Coinciding with the launch of its Shariah-compliant products, Bybit has also secured a provisional license in Dubai, UAE — a nation where Islam is the predominant religion. This move, made on September 16, marks a significant milestone for Bybit, following its establishment of a headquarters in the emirate two years prior. The license, awarded by the Virtual Asset Regulatory Authority (VARA) of Dubai, signifies an initial approval that will become fully operational once specific regulatory requirements are met.
Dubai as a Crypto Hub
Helen Liu, Bybit’s Chief Operating Officer, highlighted Dubai’s strategic advantages, noting its favorable policies and supportive environment for cryptocurrency ventures. The region’s robust regulatory frameworks and forward-looking stance on digital assets provide an ideal landscape for crypto businesses and investors seeking growth and innovation.
Bybit’s proactive approach in adapting its products to meet the needs of Muslim investors not only broadens its customer base but also reflects a deep respect for the cultural and religious contexts of its users. As the global cryptocurrency market evolves, such inclusive practices are likely to become a benchmark for other companies aiming to embrace a diverse investor portfolio.
Featured image credit: Zaid Balushi via Flickr
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