To assure compliance, Bybit worked with Zico Shariah, a Malaysia-based advising company that specializes in Islamic finance. According to Bybit, this partnership has allowed them to develop products that meet the stringent requirements of Shariah law, which governs permissible investments and trading practices for Muslims.
The account offers a way for investors to engage with the crypto market while remaining true to their faith, avoiding practices such as interest-based trading and ensuring transparency in transactions.
The Islamic financial system is founded on the guiding principles of “Shariah,” or Islamic law. One of its tenets forbids paying or charging interest on loans, stressing fair and ethical financial interactions. Instead of interest, Islamic finance relies on loss and profit-sharing agreements between borrowers and lenders. Borrowers and lenders share investment risks, gains, and losses.
Islamic finance enables investments in equities, bonds, and cryptocurrency as long as they adhere to Shariah principles. To be legal, crypto assets must use a profit-and-loss sharing structure in which investors split both gains and losses rather than receiving a predetermined return.
Before Muslims can invest in these assets, a special board reviews and approves the tokens to make sure they meet Islamic guidelines. This process checks the token’s features and how it works to ensure it follows the rules.
Bybit’s launch of Shariah-compliant products aligns with its recent acquisition of a provisional license in Dubai, granted by the Virtual Asset Regulatory Authority (VARA) on September 16.
