- Bybit has introduced a crypto-Islamic account to cater to Muslim investors following Sharia law
- The account offers spot trading and bot options, adhering to Islamic finance principles
- Crypto assets in this account operate on a profit and loss sharing model, certified for Sharia compliance
Bybit launches Sharia-compliant crypto account to cater to the investment desires of Muslim investors aligning with the concepts of Islamic finance.
Bybit Crypto-Islamic Account
Cryptocurrency exchange Bybit said it had launched new products that follow Sharia, or Islamic law—specifically designed to answer the call of the needs of Muslim investors.
On September 24, the co-founder and chief executive officer of Bybit, Ben Zhou, announced on X that an Islamic crypto account had gone live on the trading platform. Access was thereby allowed to the spot trading of Sharia-compliant tokens, a dollar cost averaging (DCA) bot, and a spot grid bot.
Bybit added that its Islamic account was “designed according to Islamic principles” and allowed investors to trade “without compromising” their religion. The exchange further explained that the products were developed in consultation with Malaysia-based consultancy firm Zico Shariah, focused on Islamic law.
How crypto assets can be compliant with Islamic law
The Islamic financial system is based upon the guiding principles of “Sharia”—Islamic Law. One such rule bars paying or charging interest on loans, with an emphasis on fair and ethical financial transactions.
Instead of interest, Islamic finance is underpinned by a profit-and-loss-sharing agreement between the borrower and lender. In such cases, the borrower and lender share investment risk, profit, and loss.
The law allows investment in instruments like stocks and bonds and, further, even in digital forms of assets like cryptocurrencies. These cryptocurrencies are also required to be in conformity with Islamic finance principles.
To be compliant, crypto assets should be based on a risk-sharing system wherein investors in the businesses will share the profits and losses of the company, not on a fixed return-on-investment basis.
Once issued, these tokens will have to be vetted and certified by a supervisory board before being sold to Muslim investors. The typical certification will involve a feature and design review of the tokens.
The conclusion is that the Islamic crypto account developed by Bybit is an innovative solution for Muslim investors. It opens a gateway where one can participate in the crypto market according to Islamic law.
Conclusion
By observing Islamic finance prescriptions, such as actual profit and loss sharing and a complete absence of interest, among others, Bybit wants to increase access to ethical investments compatible with faith and therefore give more opportunities in the digital finance world.
