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Point of Focus
- Malaysia’s regulated crypto trading volume topped $4 billion in 2025.
- BTC, ETH, XRP and XLM are among the cryptocurrencies classified as Sharia-compliant.
- Fitch ranks Malaysia among the more open Islamic crypto markets.
Malaysia has emerged as one of the most open Islamic markets for cryptocurrency, with regulated trading volumes exceeding $4 billion as authorities establish clearer rules around Sharia-compliant digital assets.
According to Fitch Ratings, trading value across Malaysia’s regulated digital asset exchanges increased 23% year-on-year in 2025, although the sector remains relatively small compared with traditional markets.
Crypto trading represented roughly 2.5% of the value traded on the country’s domestic equity market.
The growth comes as Malaysia develops one of the clearest frameworks for determining which cryptocurrencies comply with Islamic finance principles.
Malaysia builds Sharia-compliant crypto market
Malaysia’s regulatory approach has allowed a broader crypto ecosystem to develop under formal supervision.
Between 2020 and the first half of 2026, the Shariah Advisory Council of the Securities Commission Malaysia classified several major cryptocurrencies as Sharia-compliant, including Bitcoin (BTC), Ethereum (ETH), XRP and Stellar (XLM).
Fitch: Malaysia Ranks Among Most Open Islamic Crypto Markets as Regulated Volume Tops $4B
According to TheStar, Fitch Ratings reported that Malaysia has become one of the most open Islamic markets for cryptocurrencies, driven by clear regulations and Sharia-compliant… pic.twitter.com/dx3IytSSbd
— Wu Blockchain (@WuBlockchain) September 16, 2026
By the end of the first half of 2026, 10 digital asset businesses were regulated by the Securities Commission, spanning exchanges, custodians and initial exchange offering operators.
Bank participation, however, remains limited. Fitch said financial institutions primarily provide transactional services to registered crypto operators rather than directly offering trading, brokerage, custody or financing products.
The rating agency expects crypto offerings within Islamic finance to develop gradually, supported by regulatory frameworks and, in some jurisdictions, national Sharia rulings.
However, adoption is unlikely to be uniform.
Interpretations of whether cryptocurrencies comply with Islamic principles vary substantially, while global Islamic finance standard setters have yet to establish harmonized guidance.
UAE crypto activity reaches $680 billion
Malaysia is not the only Islamic finance market expanding its digital asset industry.
The UAE has developed into a major virtual asset hub, with transaction volumes across entities supervised by Dubai’s Virtual Assets Regulatory Authority reaching nearly $680 billion in 2025.
🚨 Just in: Fitch: Malaysia Ranks Among Most Open Islamic Crypto Markets as Regulated Volume Tops $4B
Reply Regulated local exchanges saw volume rise 23% in 2025 after Malaysia’s Shariah council classified BTC, ETH, XRP and XLM as compliant, with 10 licensed digital asset firms…
— OnChain Headline (@OnChainHeadline) September 16, 2026
Assets under management exceeded $2.5 billion, while more than 55 virtual asset service providers had received licenses by September 2026.
The UAE’s Higher Shari’ah Authority deemed dealing in Bitcoin permissible in 2025. A small number of conventional and Islamic banks have since started providing crypto brokerage and custody services.
Bahrain is also expanding its crypto ecosystem, hosting nine crypto asset service providers as of September. Its central bank licensed the country’s first stablecoin issuer in June.
Sharia views on crypto remain divided
Despite growing adoption, there is still no universal Islamic finance position on cryptocurrencies.
Fitch said some Sharia scholars consider cryptocurrencies incompatible with Islamic principles, while others view certain digital assets as permissible under specific conditions.
The lack of formal guidance from the Accounting and Auditing Organization for Islamic Financial Institutions and the Islamic Financial Services Board further complicates efforts to establish consistent standards across markets.
Pakistan illustrates the divergence. A recent fatwa from Darul Ifta at Jamia Darul Uloom Karachi stated that cryptocurrencies do not constitute wealth under Sharia, a ruling Fitch said could constrain crypto development in Pakistan and potentially influence other markets.
For now, Malaysia stands at the more permissive end of that spectrum, combining explicit Sharia classifications with regulated exchanges as its crypto market continues to expand.
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