Fasset Wins Malaysia License for World’s First Stablecoin Islamic Bank

Under the new license, Fasset is authorized to operate as a deposit-taking institution, expanding beyond its prior role as a digital asset platform. It will be able to offer asset-backed banking services on the blockchain, along with “zero-interest banking products,” as well as payments, cross-border transfers, and savings and investment products aligned with Islamic principles. However, the provisional nature of the license suggests a period of regulatory oversight, testing, and compliance refinement. Fasset will need to meet certain conditions and may be subject to phased expansions of permitted services.

The global Islamic finance industry has expanded rapidly, with Standard Chartered projecting that total Shariah-compliant assets will surpass $7.5 trillion by 2028. Yet, access to truly digital, Shariah-compliant banking, particularly one integrated with stablecoins and blockchain rails has been extremely limited. Fasset’s new status could help close the gap in many parts of Asia, Africa, and the broader Muslim-majority regions, especially where traditional banking is underdeveloped or costly to access.

Mohammad Raafi Hossain, CEO and Co-Founder of Fasset, said the company’s latest milestone represents a turning point for both Islamic finance and fintech innovation. “We’ve been told for years what’s ‘impossible’: that Islamic finance can’t go global, that banks can’t be built on crypto, that financial freedom isn’t for emerging markets. We’re here to prove otherwise. We can now combine the credibility of a global banking institution with the innovation of a fintech insurgent that’s fully halal. We’re on track for over $24B in volume by year-end 2026 and expect much of that to stay within our Fasset ecosystem, driving strong assets under management and opening the door to new banking services in the future.”

Fasset plans to issue stablecoins, likely backed by real-world assets or fiat, to facilitate on-chain banking operations. The architecture appears to blend traditional banking infrastructure with decentralized ledger mechanisms.

The company’s key product lines slated for launch include asset-backed savings products designed to preserve value amid currency volatility, Shariah-aligned investments in gold, stocks, or real assets, and collateralized financing products structured to avoid interest (riba) in favor of profit-sharing or margin-based models. It also plans to introduce a crypto debit and credit card that integrates with Visa, Apple Pay, and Google Pay, allowing users to spend through fiat or stablecoins, alongside cross-border remittance solutions leveraging blockchain for lower cost and higher speed.

Fasset already operates in more than 125 countries and has built a user base of approximately 500,000 globally. Its annualized trading volume reportedly exceeds $6 billion, with projections suggesting it could reach $24 billion by the end of 2026. These figures, if confirmed, position Fasset as one of the fastest-scaling fintech platforms operating across both Islamic and conventional financial ecosystems.

While the Malaysian provisional license is a headline grabber, Fasset reportedly holds multiple regulatory approvals across jurisdictions including the United Arab Emirates, Indonesia, the European Union, Turkey, and Pakistan. These licenses and registrations have bolstered its claim to regulatory credibility and cross-border capability.

The Malaysian license is from Labuan FSA (Labuan Financial Services Authority), a special jurisdiction in Malaysia known for fostering fintech innovation and offshore financial services. As with most sandbox licenses, the Labuan framework allows experimentation under supervision, meaning the license may initially carry limits on capital exposure, service scope, and client volume. For Fasset, this environment provides a controlled runway to test stablecoin banking mechanics under Islamic law while maintaining regulator visibility.

Although the approval is groundbreaking, several challenges remain before Fasset can fully operationalize its ambitions.One key challenge is Shariah certification and oversight. For many Muslims, assurance from recognized Shariah boards or institutions is essential, and Fasset must publish transparent frameworks, obtain endorsements, and maintain audit trails to satisfy religious scholars and investors.

Another issue is stablecoin collateralization and transparency. To avoid disputes over the token’s underlying backing and prevent depegging risks, Fasset will need stringent audit processes, independent attestations, and custodial arrangements that respect Islamic property principles.

Regulatory harmonization also poses difficulty. Operating hybrid crypto-banking models often brings overlapping jurisdictional requirements, demanding compliance with anti-money-laundering rules, know-your-customer obligations, capital-adequacy ratios, and cybersecurity standards.

Beyond regulation, customer trust and education will be decisive. In many Islamic markets, crypto remains misunderstood or viewed skeptically. Fasset must demonstrate clear halal adherence, financial stability, and risk transparency to win over mainstream depositors and investors. At the same time, the company faces competitive, and execution risks as established Islamic banks and fintech newcomers may race to replicate or surpass its model.

If Fasset’s initiative succeeds, it could set a global precedent for digital Islamic neobanks, inspiring similar ventures across the Middle East, Southeast Asia, and Africa. It may encourage traditional Islamic banks to integrate blockchain rails, tokenized assets, or stablecoin-based settlements into their systems. The broader implications stretch even further. Fasset’s model could enable Islamic decentralized finance, for instance, tokenized sukuk, murabaha financing on-chain, or wakala and mudaraba structures implemented through smart contracts, but with institutional governance and regulatory oversight rather than speculative trading.

Scalability, however, will depend on regional policy alignment, acceptance of stablecoins within local jurisdictions, interoperability among blockchain systems, and the ability to create compliant remittance corridors across borders. If those conditions converge, Malaysia’s move may set the blueprint for a new category of halal digital finance, where Shariah principles and financial technology coexist within the same institutional framework.