Malaysia Mulls Shariah-Centric Blockchain Hub for Labuan IBFC

• Malaysia has announced plans for a new blockchain hub.
• The blockchain hub will cater to the Islamic digital economy.
• It will be available in a special economic zone controlled by the Malaysian government.

Malaysia’s Finance Minister, II Datuk Seri Amir Hamzah Azizan, announced on Tuesday a master plan for the world’s first Shariah-compliant blockchain hub (SBH) for the Labuan International Business and Financial Center (Labuan IBFC).

Established in 1990, Labuan IBFC is a special economic zone of the Malaysian government. It serves various business structures and investment solutions to facilitate cross-border transactions and global business dealings across banking, insurance, wealth management, and digital financial services sectors.

Bringing the Islamic Digital Economy to Blockchain

According to a local media outlet report on May 28, Labuan IBFC has created the SBH master plan with a vision to transform the special economic zone into a premier digital financial hub and a launchpad for blockchain technology.

“This master plan harnesses Blockchain technology to enhance the Islamic digital economy, ensuring it meets the needs and values of the global Muslim community while positioning Malaysia as a global leader in Islamic digital finance,” Azizan stated.

Labuan Financial Services Authority director-general Nik Mohamed Din Nik Musa lauded the SBH master plan, noting that it was poised to catalyze progress and foster engagement, connection, and collaboration among global fintech and digital technology service providers.

The report said the Malaysian federal government has granted Islamic digital players in Labuan IBFC a five-year, 0% tax exemption starting from the 2024 assessment year to bolster the zone’s status as a hub for Islamic finance.

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