In the rapidly evolving world of cryptocurrency, the intersection of technology and religion is gaining attention. One particular area of interest is the compatibility of digital assets with Islamic principles, known as Shariah-compliance. Mohammed AlKaff AlHashmi, co-founder of “Islamic Coin,” believes that cryptocurrencies can be considered Shariah-compliant if they serve as a store of value or a medium of exchange. He asserts that Islam’s robust ethical framework is adaptable to modern technological advancements, including blockchain and cryptocurrencies.
Islamic Coin secured $200 million in funding
While there has been a shift in perception towards Shariah-compliant cryptocurrencies, many Islamic-themed digital tokens have struggled to match the success of pioneering coins like Bitcoin and Ethereum. However, Islamic Coin, co-founded by AlHashmi, stands out as an exception. The project recently secured a remarkable $200 million in funding from ABO Digital, indicating substantial financial support. AlHashmi attributes Islamic Coin’s success to its multifaceted approach, which broadens its reach and enhances its value proposition.
He also suggests that the project’s positive reception within the Islamic community underscores its approval of this approach. Despite its success, Islamic Coin has faced criticism from some who dispute its claims of Shariah-compliance. Critics argue that the coin does not adhere to Islamic principles as proclaimed and accuse AlHashmi and his team of misleading devout Muslims. In response, AlHashmi defends the project’s fundamental architecture and ethos, pointing to elements within Islamic Coin that support its Shariah-compliant claims.
This debate underscores the complexity of determining the Shariah-compliance of cryptocurrencies and the need for clear guidelines in this evolving space. The Islamic community’s evolving stance on cryptocurrencies reflects a broader trend. Initially cautious about new technologies, Islamic scholars are gradually recognizing the potential for digital assets to align with Islamic principles, provided they are not used for activities that violate these principles, such as usury or trading prohibited substances. Islam’s ethical framework has proven adaptable to modern technological advancements, including blockchain and cryptocurrencies.
Crypto regulation in Europe vs. the Middle East and North Africa
As awareness grows, resistance often gives way to acceptance, not only within the Islamic landscape but also in broader societal contexts. Furthermore, an increasing number of Islamic scholars and financial institutions are exploring blockchain technology’s capabilities, such as smart contracts, transparency, and community governance. They are finding that these features align well with the principles of Islamic finance, contributing to a more favorable view of digital assets within the Islamic community and fostering greater acceptance and adoption. The regulatory environment for cryptocurrencies differs between the Middle East and North Africa (MENA) and Europe, shaped by their unique socio-economic, cultural, and political factors.
Europe is often seen as a leader in financial innovation, but it has faced challenges, as exemplified by the 2008 financial crisis. In contrast, the Islamic financial system, prevalent in the MENA region, has demonstrated resilience through community-centric values. The system’s emphasis on interest-free, balanced finance prioritizes community well-being over profit, contributing to its stability. However, the Islamic financial system has lagged in adopting modern technology. Islamic Coin aims to bridge this gap, inspiring more Shariah-oriented fintech ventures to emerge in the market, and further aligning technology with Islamic finance principles.
Islamic Coin’s claim of being Shariah-compliant is supported by a Fatwa, a significant Islamic ruling from renowned Islamic scholars and professionals in Islamic banking. This endorsement serves as a rigorous validation of the coin’s adherence to Shariah principles. Beyond the Fatwa, Islamic Coin’s design and operational framework are deeply rooted in Islamic financial principles. It operates on a profit-and-loss sharing system, aligning with the prohibition of interest-based lending in Islamic finance. Moreover, every transaction on the HAQQ blockchain is transparently recorded on a decentralized ledger, ensuring further compliance.
The evolving relationship between cryptocurrency and Islam reflects a broader shift in how technology is viewed within the Islamic community. As awareness grows and technology advances, cryptocurrencies may increasingly find acceptance within the framework of Islamic principles. Projects like Islamic Coin strive to bridge the gap between modern finance and ethical financial practices, paving the way for a more inclusive financial ecosystem that respects diverse religious and ethical values.
