Islam and cryptocurrency
The growing interest in cryptocurrencies worldwide extends naturally to the Gulf and Southeast Asia, which is the main center of Islamic Finance . However, because cryptocurrency and related technologies are the product of financial engineering and speculative objects, these gold coins are not in conformity with religious beliefs. This is because the principle of Islam, in addition to not allowing interest payments, also emphasizes actual economic activity based on physical assets rather than speculation.
To increase the influence of the debate, cryptocurrency startups hope to introduce tools backed by physical assets that have been proved effective by Islamic consultants. For example: To try to limit speculation, each OneGram cryptocurrency unit supports at least one gram of physical gold stored in a vault.
Ibrahim Mohammed, who founded the company with other investors last year, said: “Gold is the first currency form of Islamic society, so this is appropriate. “We are trying to prove the rules and regulations from Sharia. Fully compatible with digital blockchain technology. "
To date, coins worth tens of millions of US dollars have been issued (about 60% of the total planned amount). OneGram hopes to publish all of this information before the exchange is scheduled to be launched at the end of May. The company received a ruling that its cryptocurrency complies with the Islamic principle of Al Maali Consulting, a Dubai-based consulting firm that is one of dozens of consulting firms worldwide and advises on the compliance of financial instruments with Islamic standards.
OneGram is not the first startup to use this method. In Malaysia, HelloGold launched its initial offer of gold cryptocurrency in October after it was approved by Islamic scholars from Kuala Amanie Advisors.
HelloGold’s chief marketing officer, Manuel Ho, stated that its coins are in line with Islamic principles because transactions occur within a limited period of time, making them more unstable and solving the problem of ambiguous pricing. There are others: Halal Chain in the United Arab Emirates launched an ICO event in December. The price of the Halal chain stores has nothing to do with gold, but it is related to the data of Islamic allowed goods
Global Islamic Law
Islamic national authorities have not ruled whether cryptocurrencies are allowed, and several global agencies recommend Islamic financial standards, but no one has the right to actually implement them. Many governments seem to be in conflict: worrying about potential instability, but not willing to lose the opportunity to benefit from new technologies.
The Central Banks of Saudi Arabia and the UAE warned their citizens about the risks of bitcoin transactions but did not implement a complete ban. Islamic jurists in South Africa have ruled in favor of cryptocurrencies and believe they have become socially acceptable and commonly used.
However, in October last year, Darul Ihsan Center headquartered in Durban refused to support them on the grounds that they were concerned about potential MLM activities. In addition, Turkey some scholars in India and the United Kingdom have marked the cryptocurrency as not allowed. In January this year, Egypt’s Grand Mufti declared that it should not trade.
The reason why this debate is particularly complex is that thousands of digital coins each have unique features related to distribution, mining, and transactions, says Farrukh Habib, a research officer at the International Islamic Finance Research Institute in Malaysia. . Because of this fact, Habib considers the “package” of Islamic Shari'a ruling on cryptocurrency to be inappropriate:
Habib said: “They also have great differences in potential commodities, projects or businesses, so it is not appropriate for everyone to carry out a comprehensive Shariah ruling. “Most existing Islamic The teachings ruling either treats Bitcoin only or includes all types of cryptocurrencies, ignoring its specificity. "