IBM and Stronghold, a financial institution announced a stablecoin that will be anchored on the US dollar this week. The token called Stronghold USD is built on top of the Stellar network.
There is more good news for the platform. Islamic scholars have certified Stellar, sharia-compliant and it applies to both the blockchain technology which underlies the network and Stellar Lumens, its native digital currency.
The certification was given by the Shariyah Review Bureau, a firm that advises the central bank on sharia compliance.
The certificate now opens up more opportunities for the network and digital currency in the Middle East and other Islamic countries.
Stellar has a total market capitalization of $5.5 billion according to data from CoinMarketCap. It is now the sixth largest cryptocurrency having climbed up from eighth in May and looks set for more gains.
In just over a month, it has added nearly $2 billion to its valuation defying the general downward trend in the rest of the market. Its total market capitalization stood at just $3.6 billion on June 10. In the last seven days it has gained nearly 30%.
However, it is significantly trading lower than its high of $1 a unit in January to $0.29 at the moment.
Push for partnerships
Like Ripple, Stellar has also been actively looking for partnerships in the Middle East
“We have been looking to work with companies that facilitate remittances, including in the United Arab Emirates, Saudi Arabia and Bahrain. It’s a huge market,” Lisa Nestor who is the director of partnerships told Reuters.
The status of cryptocurrencies under sharia law is a matter of controversy. Scholars have given mixed signals whether they are permissible (halal) or haram (not permissible).
According to Muhammad Abu-Bakar, bitcoin and other cryptocurrencies fit under the strict definitions of money under Islamic law. The study reached the conclusion drawing from the fact that cryptocurrencies were recognized in countries such as Germany and the US.
A prominent Egyptian scholar has however declared cryptocurrencies as haram or impermissible.
In the case of Stella Lumens, the bureau found the transfer of tokens to be equivalent to the transfer of rights.
According to Reuters, Bahrain is one of the few countries exploring cryptocurrencies as its tries to become a financial hub in the region.
According to the same news outlet, Stellar engaged with Bahrain’s Economic Development in 2017, a move that has led to other engagements in the region.
Stellar network is focuses on providing more efficient peer to peer transfers without the need of middlemen like banks. Ripple on the other hand focuses on cross border transfers but its main targets are banks and financial institutions.