The article explores how Islamic banks, alongside regular banks, impact financial development and economic welfare in Muslim countries. The researchers studied 22 countries with both types of banks from 1999 to 2011. They found that Islamic banks play a positive role in improving financial intermediation, deepening, and economic welfare, especially in low-income or Muslim-majority countries, and those with high uncertainty avoidance. Moreover, having more Islamic banks in the market is linked to higher efficiency in regular banks.