Fasset and Labuan FSA Launch World’s First Islamic Fintech Sandbox

Fasset has received a provisional license from Malaysia’s Labuan Financial Services Authority (FSA), marking the creation of the world’s first Islamic fintech sandbox designed to test and scale stablecoin-powered, Shariah-compliant digital banking services.

The partnership opens a new frontier for Islamic finance, blending the stability of faith-based principles with the innovation of blockchain technology.

Through this regulatory partnership, Dubai-headquartered Fasset will operate under a controlled sandbox framework to develop digital financial products that align with Shariah law.

The initiative allows the fintech firm to combine the credibility of an internationally recognized financial hub with the agility of a Web3 startup—setting the stage for a new era of halal digital banking across Asia and Africa’s underserved regions.

CEO Mohammad Raafi Hossain described the initiative as a bridge between tradition and innovation, saying the company aims to “bring trust, transparency, and technology to Muslim communities worldwide.”

Islamic finance, rooted in the ethical principles of Shariah, prohibits interest (riba), excessive uncertainty (gharar), and investments in industries such as alcohol, gambling, or adult entertainment. Within this sandbox, Fasset can now offer deposit-taking services, zero-interest financing, and cross-border payment systems—all backed by stablecoins that ensure transparency and compliance.

Currently serving over 500,000 users in 125 countries, Fasset is modeling its expansion on the success of NuBank in Latin America, but tailored for faith-driven and emerging economies. The company’s digital suite includes savings tools, yield products, and access to investments spanning US equities, gold, and cryptocurrencies.

In parallel, Fasset is preparing to launch a crypto debit card for daily spending and develop “Own,” an Ethereum Layer 2 built on Arbitrum to settle real-world assets on-chain. The firm also holds regulatory approvals in the UAE, Indonesia, Turkey, and the European Union.

The Launchpad for Shariah-Compliant Fintech

The Labuan FSA license enables Fasset to operate within the Labuan International Business and Financial Centre (IBFC), Malaysia’s offshore financial hub known for facilitating cross-border Islamic finance innovation.

Although the license is not equivalent to a full digital banking permit from Bank Negara Malaysia, it represents a key regulatory milestone—transforming Labuan into a testbed for the global Islamic fintech industry.

The approval also coincides with a broader global shift toward stablecoin integration in cross-border payments. Visa recently launched a pilot allowing banks to pre-fund international transfers using Circle’s USDC and EURC stablecoins, while Swift announced a partnership with Consensys and over 30 institutions to explore blockchain-based settlement infrastructure.