Stablecoin-Powered Islamic Bank Aims to Bridge Muslim World's Financial Inclusion Gap

Malaysia has granted Fasset, a Dubai- and Jakarta-based digital banking and investment platform, a provisional license to operate the world's first stablecoin-powered Islamic digital bankFasset Wins Malaysia License to Launch First Stablecoin-Based Islamic Digital Bank^[1]. The license, issued by the Labuan Financial Services Authority (FSA), allows Fasset to offer Shariah-compliant financial services within a regulated sandbox framework. This includes deposit-taking, zero-interest banking, cross-border payments, and investment products in U.S. stocks, gold, and cryptocurrenciesMalaysia Approves First Stablecoin-Powered Islamic Digital Bank, Fasset^[2]. The initiative aims to address gaps in financial inclusion across Muslim-majority regions, particularly in Asia and Africa, where access to halal, asset-backed financial products remains limitedFasset Wins Malaysia License to Launch First Stablecoin-Based Islamic Digital Bank^[1].

Fasset's CEO, Mohammad Raafi Hossain, emphasized the integration of "the credibility of a global banking institution with the innovation of a fintech insurgent"Fasset Wins Malaysia License to Launch First Stablecoin-Based Islamic Digital Bank^[1]. The company plans to launch a Visa-linked crypto debit card and develop "Own," an Ethereum Layer 2 network built on Arbitrum, to facilitate on-chain settlement of real-world assetsMalaysia Approves First Stablecoin-Powered Islamic Digital Bank, Fasset^[2]. Stablecoins will underpin the platform's offerings, enabling users to avoid interest-bearing products while preserving asset value against inflation or currency swingsFasset Wins Malaysia License to Launch First Stablecoin-Based Islamic Digital Bank^[1]. Fasset's existing infrastructure already processes over $6 billion in annualized transaction volume across 125 countries, supported by regulatory approvals in the UAE, Indonesia, the EU, Turkey, and PakistanDubai Fasset Gets Malaysia Banking License to Launch Shariah-Compliant Stablecoin Bank^[3].

The Malaysian regulatory landscape is evolving to accommodate digital assets, with the Securities Commission proposing a framework to accelerate token listings on regulated exchangesMalaysia Approves First Stablecoin-Powered Islamic Digital Bank, Fasset^[2]. The Digital Asset Innovation Hub, launched earlier this year, enables projects to explore use cases such as programmable payments and stablecoin-driven financial inclusion under Bank Negara Malaysia's supervisionMalaysia Approves First Stablecoin-Powered Islamic Digital Bank, Fasset^[2]. These reforms align with Malaysia's broader strategy to position itself as a global leader in Islamic finance, a sector projected to grow from $8 billion to $12.5 billion by 2028Malaysia Approves First Stablecoin-Powered Islamic Digital Bank, Fasset^[2].

Islamic finance principles prohibit interest (riba), excessive risk (gharar), and investments in unethical industries. Fasset's model adheres to these guidelines by prioritizing risk-sharing and ethical screening. The company's pilot programs will test Shariah-compliant savings and yield-bearing products, targeting underserved communitiesMalaysia Approves First Stablecoin-Powered Islamic Digital Bank, Fasset^[2]. Meanwhile, Malaysia's Islamic finance sector has retained its top ranking in the ICD-LSEG Islamic Finance Development Indicator (IFDI) for 11 consecutive years. Total assets in the sector reached MYR 20.26 trillion ($4.5 billion) in 2022, with forecasts projecting growth to MYR 30.17 trillion ($6.8 billion) by 2027.

The approval reflects a broader trend of Islamic fintech innovation, with competitors like Binance, Bybit, and Crypto.com introducing Sharia-compliant productsDubai Fasset Gets Malaysia Banking License to Launch Shariah-Compliant Stablecoin Bank^[3]. However, Fasset's stablecoin-based approach distinguishes it by leveraging blockchain to streamline cross-border transactions and reduce reliance on traditional banking systemsFasset Wins Malaysia License to Launch First Stablecoin-Based Islamic Digital Bank^[1]. Analysts note that while the sector is expanding, it remains underserved, particularly among Gen Z Muslims, who are increasingly adopting digital Islamic finance toolsMalaysia Approves First Stablecoin-Powered Islamic Digital Bank, Fasset^[2].

Malaysia's strategic initiatives, including the Digital Asset Innovation Hub and proposed regulatory reforms, aim to foster a competitive environment for Islamic fintech. These measures are expected to attract further investment, with a 2025 report by the ACCESS Blockchain Association estimating that formalizing crypto mining could generate RM700 million ($155.5 million) in hardware and infrastructure investmentsDubai Fasset Gets Malaysia Banking License to Launch Shariah-Compliant Stablecoin Bank^[3]. As Fasset prepares to launch its services, the move underscores Malaysia's ambition to bridge traditional Islamic finance with modern technology, setting a precedent for global adoption.