KUALA LUMPUR (Oct 10): The Labuan Financial Services Authority (Labuan FSA) has granted conditional approvals to Green Digital Bank Corp and Fasset Islamic Digital Bank Ltd to operate as Islamic digital banks under its i-BOX sandbox framework.

In a statement on Friday, Labuan FSA said the approvals, issued under the Guidelines on the Establishment of Labuan Islamic Digital Bank and Section 63 of the Labuan Islamic Financial Services and Securities Act 2010 (LIFSSA), allow both banks to begin preparatory work, but they are not yet permitted to offer services to customers.

Before receiving a provisional licence, both banks must meet strict operational and prudential requirements, including demonstrating:

This move is part of Labuan FSA’s broader Islamic Digital Asset Centre (IDAC) initiative, which aims to attract fintech and digital finance players to the Labuan International Business and Financial Centre (Labuan IBFC), and carve a niche in the digital Islamic finance space.

Labuan FSA called the approvals an “important milestone” in advancing digital Islamic finance in the region and confirmed it will maintain close oversight of the sandbox participants.

Green Digital Bank Corp, backed by Nasdaq-listed Greenpro Capital, plans to offer a shariah-compliant digital bank with fiat-crypto interoperability.

Fasset Islamic Digital Bank Ltd, a digital asset platform, is working on a stablecoin-powered Islamic bank.

These two approvals mark the first major steps towards launching fully operational Islamic digital banks in Labuan under the sandbox regime.