UAE's Fasset Secures Malaysian License to Launch Stablecoin-Based Islamic Digital Bank

Fasset, a Dubai-headquartered digital banking and investment platform, has received a provisional license from Malaysia’s Labuan Financial Services Authority (FSA) to operate what it describes as the world’s first stablecoin-powered Islamic digital bank.

The license permits Fasset to offer Shariah-compliant banking services within a regulated sandbox, providing deposit accounts, cross-border payments, and zero-interest financial products to underserved markets in Asia and Africa. The approval marks a major step for the firm, which serves 500,000 users across 125 countries.

“Combining the credibility of a global banking institution with the innovation of a fully halal fintech platform opens up new possibilities for digital finance,” said Mohammad Raafi Hossain, Fasset’s CEO.

Islamic finance, or Shariah-compliant banking, prohibits charging interest, avoids excessive risk and uncertainty, and restricts investments in industries considered harmful or unethical, such as alcohol, gambling, or pornography. Fasset’s new license allows it to provide banking services fully aligned with these principles, leveraging stablecoins as a foundation for digital savings, investment, and payments.

Fasset has outlined plans to issue a crypto debit card for everyday spending and to develop Own, an Ethereum Layer 2 on Arbitrum designed for settling real-world assets. The company already holds regulatory approvals in the UAE, Indonesia, Turkey, the European Union, and Pakistan.

The Labuan FSA license allows operation within the Labuan International Business and Financial Centre (IBFC), Malaysia’s regulated offshore financial hub. While not equivalent to a full digital banking license from Bank Negara Malaysia, it enables Fasset to pilot a comprehensive suite of Islamic digital banking services.

This milestone coincides with broader momentum in stablecoin adoption for payments. Last month, Visa initiated a pilot enabling banks to pre-fund cross-border payments using stablecoins such as USDC and EURC, shortly after SWIFT partnered with Ethereum developer Consensys and over 30 financial institutions to explore blockchain-based, real-time settlement systems.

With its new Malaysian license, Fasset aims to scale its offerings from digital asset investing to full-service, Shariah-compliant banking, targeting regions historically underserved by traditional financial systems. The move underscores the growing intersection of stablecoins, fintech innovation, and Islamic finance in emerging markets.