The Central Bank of Bahrain (CBB) has issued a license to CoinMENA, a Bahrain-headquartered new crypto exchange preparing for its launch, allowing the business to offer its services across the region in compliance with the Sharia law. CoinMENA aims to make its platform available in Bahrain, as well as the UAE, Saudi Arabia, Kuwait, and Oman.
The exchange said it will offer bitcoin (BTC), ethereum (ETH), XRP, litecoin (LTC), and bitcoin cash (BCH).
“As CoinMENA grows, we will be providing access to additional digital assets and expanding the jurisdictions we operate in, with the view of becoming one of the leading digital assets exchanges on a global scale,” Dina Sam’an, Co-Founder and Managing Director of CoinMENA, was quoted as saying in an announcement. The company aims to launch the platform “soon.”
The CBB has issued a Category 2 Crypto Asset Services Company License to the company which states that the exchange complies with the rules of Sharia, or Islamic law. This paves the way for the platform in a number of Middle Eastern markets where Islamic finance dominate’s their economic landscapes. The sharing of profit and loss, and the ban on the collection and payment of interest are two of the foundations of Islamic banking.
“Each transaction must be related to a real underlying economic transaction,” according to an analysis by the Vancouver-based Corporate Finance Institute. “Parties entering into the contracts in Islamic finance share profit/loss and risks associated with the transaction. No one can benefit from the transaction more than the other party.”
By expanding cryptocurrency trade into the world of Islamic finance, CoinMENA could tap into a market that was estimated to be worth about USD 2.1tn last year, according to a report released by S&P Global. Islamic finance has a strong foothold in the Middle East, but is also growing in other regions of the world with significant Muslim populations.
“Sharia-compliant assets represent 14% of total banking assets in [the Middle East, North Africa, and South Asia region] and 25% of banking assets in the [Gulf Cooperation Council region], suggesting that Islamic banking continues to be systemically important in these countries,” according to the report.
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