Thursday, December 1, 2022
spot_img
UncategorizedLabuan launches initiative to attract Islamic digital assets and fintech companies

Labuan launches initiative to attract Islamic digital assets and fintech companies

In a bid to position itself as a strong player in the digital Islamic finance space, the Labuan Financial Services Authority (Labuan FSA) has launched its Islamic Digital Asset Centre (IDAC) initiative, which aims to attract more digital assets and fintech players to the Malaysian federal territory of Labuan.

IDAC is in line with the Labuan International Business and Financial Centre (Labuan IBFC)’s Strategic Roadmap 2022–2026, which prioritizes the center’s expansion into the market segments of digital financial business and Islamic finance.

“The Labuan IBFC is envisaged to play a significant role as a fundraising and investment hub in the global digital space, with a niche in ESG and Shariah compliant activities. The unveiling of IDAC is timely, to serve as a complete digital ecosystem, bringing together technology-driven solutions in terms of fundraising and promoting economic development in other sectors within Islamic finance, potentially making Labuan the digital gateway with Islamic finance capabilities for all types of global investors and players,” the regulator said.

The center’s comprehensive infrastructure supports Shariah compliant transactions, and under its dual financial system (featuring a Labuan Islamic financial services and securities Act separate from its conventional counterpart), the Islamic finance sector has strong potential for expansion and growth.

Additionally, the Shariah Supervisory Council of the Labuan FSA has highlighted the Shariah compliance of Labuan’s Islamic digital-based solutions, which cater to businesses including neobanks, robo-advisors, digital asset exchanges, crypto trading platforms, and blockchain and e-payment systems, among others.

The Labuan FSA also shared that it has plans to roll out guidelines on digital assets, ESG and Islamic finance to further enhance the center’s governance.

Meanwhile, the Labuan IFC in September 2022 launched its Labuan Islamic/ESG Digital Exchange. “The recently launched first Shariah compliant ESG-based digital exchange (Labuan Exchange) will focus on tokenization of securities including digital Sukuk, allowing for immediate buying and selling of securities through its integrated blockchain technology solution and support from a comprehensive ecosystem,” a statement read.

The Labuan FSA, which licensed its first digital finance-related entity in 2017, now houses over 90 digital financial service providers, including Islamic digital banks.

LEAVE A REPLY

Please enter your comment!
Please enter your name here