Fasset gets Labuan FSA green light to pilot stablecoin-powered Islamic digital bank

Fasset has secured a provisional green light from Malaysia’s Labuan Financial Services Authority (Labuan FSA) to roll out what the company describes as the first stablecoin-powered Islamic digital bank. The approval places Fasset inside a regulated sandbox at the Labuan International Business and Financial Centre (IBFC), enabling the all-in-one financial super app to test and scale Shariah-compliant products under oversight, the firm said in a Tuesday announcement.

With the sandbox authorization, Fasset says it can pair the trust associated with a globally supervised banking environment with the speed and product innovation typical of fintech—delivered in a way that is fully compliant with Islamic principles. In statements accompanying the news, CEO Mohammad Raafi Hossain framed the milestone as an opportunity to blend banking-grade credibility with halal-focused innovation for Muslim and ethical finance users worldwide.

Islamic finance is based on Shariah, which bars interest-based lending (riba), discourages excessive uncertainty or speculation (gharar), and excludes investment in sectors deemed harmful or unethical, such as alcohol, gambling, and pornography. Instead, it emphasizes profit-and-loss sharing, asset-backed financing, and transparency. These guardrails have increasingly intersected with digital finance and blockchain-backed instruments as providers seek to design products that align with faith-based and ethical investment mandates. In another example of the growing mainstreaming of stablecoins, MoneyGram recently said Colombians will soon be able to save in dollar- and euro-denominated stablecoins through its new app.

The Labuan sandbox approval opens the door for Fasset—already serving around 500,000 users across 125 countries—to offer deposit-taking services, facilitate cross-border payments, and provide zero-interest banking models consistent with Shariah. Headquartered in Dubai, the company says its ambition is to recreate a NuBank-style success story for underserved communities across Asia and Africa, but with a product set designed around Islamic finance. Its app currently provides digital savings and yield opportunities as well as access to investments spanning U.S. equities, gold, and crypto assets.

Ahead of the license news, Fasset had teased a slate of upcoming product unveilings. The company now says it intends to issue a crypto-enabled debit card aimed at everyday spending and to introduce “Own,” an Ethereum layer-2 network built on Arbitrum, designed to settle real-world assets on-chain. Fasset also reports holding additional regulatory permissions or registrations in the United Arab Emirates, Indonesia, Turkey, and across parts of the European Union, as it builds out a multi-jurisdiction footprint for compliant digital finance services.

It’s important to note that a Labuan FSA license allows operations within the Labuan IBFC—Malaysia’s regulated offshore financial center—under its own legal and supervisory framework. This provisional sandbox approval is not the same as a full digital banking license issued by Bank Negara Malaysia, the country’s central bank. Companies typically use the Labuan regime to pilot and refine offerings under formal oversight before pursuing broader national licenses or cross-border expansions. Cointelegraph sought comment from Fasset for further detail on its rollout plans but did not receive a response by the time of publication.

The timing of Fasset’s initiative dovetails with accelerating adoption of stablecoins and blockchain rails in global payments. In September, Visa launched a pilot that allows banks and payment institutions to pre-fund cross-border transfers using Circle’s USDC and EURC stablecoins, an effort aimed at cutting settlement latencies and costs. Just a day earlier, Swift announced it is collaborating with Consensys and more than 30 financial institutions on a blockchain-based settlement layer intended to support always-on, real-time cross-border payments and atomic settlement. These experiments, if successful at scale, could reduce friction in remittances and trade finance—use cases that are especially critical in emerging markets where Islamic banking often has deep roots.

For Fasset, combining Shariah-compliant structures with the programmability and speed of stablecoin technology could help address persistent gaps in financial access. Zero-interest banking products that rely on profit-sharing or fee-based models, transparent asset-backed structures, and 24/7 cross-border settlement may appeal to both Muslim-majority markets and a broader set of consumers seeking ethical or cost-effective alternatives to conventional banking. The company’s planned Ethereum layer-2, focused on tokenizing and settling real-world assets, also aligns with a wider industry push to bring traditional instruments—such as bills of exchange, sukuk, or commodities—on-chain with clearer auditability and compliance controls.

Still, Fasset’s vision will hinge on careful regulatory navigation. While the Labuan sandbox allows controlled experimentation, scaling a full-featured Islamic digital bank across multiple jurisdictions will require harmonizing differing rules on stablecoins, custody, disclosures, and Shariah governance. The company’s growing list of licenses and registrations suggests it is betting that compliant infrastructure and conservative risk management can coexist with Web3-era products.

As global payment giants test stablecoin settlement and interbank networks explore blockchain rails, firms like Fasset are seeking to translate those advances into retail and SME banking experiences that meet specific cultural and ethical requirements. Whether its “stablecoin-powered Islamic digital bank” becomes a new template for inclusive finance will depend on execution, user trust, and the evolving regulatory consensus on digital assets.

For more on the policy and leadership dynamics shaping crypto in traditional institutions, see Cointelegraph Magazine’s feature on former U.S. congressional candidate Bo Hines and the challenges of stepping away from a top crypto policy role under the Trump administration.