Fasset company wants to use cryptocurrency technology (specifically stablecoins) to create a fully digital bank that operates according to Islamic law (Shariah).

Their new provisional Malaysian license is a green light to start testing this new model, introducing modern, zero-interest, and ethical financial services to tens of millions of individuals in Asia and Africa. The act is seen as a major step toward bridging the old world of ethical Islamic finance and the new world of digital assets.

About Fasset?

Fasset is a global fintech company, also referred to as a “financial super-app.” It started out as a digital asset exchange (i.e., an online platform where one can buy, sell, and trade cryptocurrencies and other digital tokens). With the aim to encourage financial inclusion and allow people to build their wealth, especially in the developing world (like Asia and Africa) where conventional banking facilities are not easily attainable.

Their main Products (Existing & Under Development):

Digital asset trading.

• Global money transfer (remittances) and digital wallets.
• Zero-interest savings and investment products.
• A future crypto debit card for paying in digital assets in the real world.

How Fasset Makes Money

Fasset doesn’t just have one source of revenue. It diversifies its revenues:

• Maintaining a minor commission when users buy, sell, or swap digital assets on its exchange.
• Charging fees to create digital tokens that contain a real-world asset’s value (e.g., real estate or stocks).
• Charging commission on cross-border remittances.
• Enabling a return (non-interest, Shariah-compliant) from lending and borrowing facilities against digital assets.
• Tiered subscription plans or revenue-sharing opportunities through partnerships (e.g., with Mastercard).

What is a “Stablecoin-Powered Islamic Digital Bank”?

This is the cutting-edge jargon for what Fasset wants to be. Let’s break down the three components:

Digital Bank

A bank that is operated almost entirely online through a mobile website or application, and which does not need a large network of local branches. It offers services including payments, deposits, savings, and investments in a very efficient, mobile-focused way.

Islamic (Shariah-Compliant)

Everything the bank operates, offers, and sells must be founded on the principles of Shariah law.

• Payment or charging interest is forbidden. Money must not be used as a commodity that generates more money simply by lending.
• Zero-interest mechanisms are utilized by the bank to replace traditional loans with profit-and-loss sharing (Mudarabah) or asset-backed lending.
• Transactions are tied to real services or physical assets to avert risk-taking or speculation to excess.
• Services are likely to be asset-backed (e.g., tokenization of real estate or gold) and contracts are likely to be transparent and clear.

Stablecoin-Powered

By building the whole banking system on stablecoins, they are able to offer users a shariah-compliant, digital, and stable value-holding and transfer mechanism, which is cheaper and quicker than incumbent global banking.

Traditional cryptocurrencies (like Bitcoin) are highly volatile. For a bank to function in the way it does for day-to-day transactions and savings, it needs a stable means of exchange.

Fasset has been granted a license to build and run a working replica of the first stablecoin-backed Islamic digital bank. They are using this authorized “sandbox” environment to iron out the tech as well as compliance before applying for a full license to take on the major banks.