The world’s first Sharia compliant cryptocurrency, Islamic Coin, will be launched to the public next month, one of its co-founders told Arabian Business.
But what makes it halal?
Islamic Coin, still in private sales mode, operates on the Haqq Blockchain, a network which is compatible with thousands of applications worldwide.
Haqq, which means ‘truth’ in Arabic, stringently abides by Islamic principles and traditions on finance, with the Islamic Coin being its native cryptocurrency.
The currency, still in private sales mode, has been gaining support from venture capitals and financial institutions. According to Islamic Coin co-founder, Mohammed AlKaff AlHashmi, this support will build the community’s trust and confidence in the currency’s traction before its public release.
World’s first Sharia compliant cryptocurrency to launch in May 2023
AlHashmi said that the coin will be launched to the public in May, but did not specify a date.
“We started with private sales mode for a reason. We don’t want people to think that we are using the word ‘Islamic’ to play on their emotions and then moving on to become an investment in something they don’t know,” he told Arabian Business.
“We did some market research and found out that Bitcoin, for example, has become the most famous and successful coin because they have the ‘first mover’ advantage, and it was the first coin,” said AlHashmi.
“When you look at Ethereum, they were the first to start smart contracts. So there is a common factor here: being a ‘first mover’ in something that addresses community needs. I came to the conclusion that if we want to do something successful and meaningful in the blockchain and crypto world, then we should bring something that we are the first movers in and then it should address the needs of and add value to the community.”
Halal: A growing market
The global Islamic finance market is expected to reach over $3.69 trillion by 2024, fuelled by a growing interest in Sharia compliant finance. The Halal products market is projected to reach more than $4 trillion.
“It’s not only about food anymore, it’s also about healthcare products, cosmetics, how to make sure that everything is really Halal and fits with community ethics and values,” AlHashmi said.
The global Muslim community has grown to over 1.8 billion people, which represents a huge untapped and “underserved” market in the crypto world, said AlHashmi adding that Islamic finance is being embraced by non-Muslims worldwide.
Interestingly, at least 50 percent of private sales made in Islamic Coin came from non-Muslims.
“There is no clean ecosystem and environment where Muslims or people who follow Sharia compliance can come and do their projects in.”
“By this, I don’t mean that Bitcoin or Ethereum or other coins are not halal. I cannot judge, but if you look at the available blockchains in the market, it will not make sense that for example, I put a Sharia compliant project in a blockchain that at the same time has a casino project, a gambling project, or another project that charges interest – these would all conflict with Sharia principles.”
“There is always a need to have a clean environment where people can put their projects without having a doubt or thinking: is this halal? Is this haram? Is this Sharia compliant?”
The Haqq blockchain is eco-friendly and has been built in a way that is compatible with Ethereum, making it easy for people who build their projects there to migrate them somewhere else or integrate them.
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Ten percent of every minted Islamic Coin goes to Evergreen DAO, a non-profit virtual foundation focused on long term sustainability and community impact, to fund community projects. However, the coin’s co-founders don’t decide on what projects should be funded.
“We don’t have any influence over Evergreen. It has its own system, which will be launched in Q3 of this year, and the community will be able to vote for the projects to be funded. Then it will go to the Sharia board to make sure it is Sharia compliant.”
Islamic coin as appointed a Sharia board to decide whether a project is compliant with Islamic principles, which AlHashmi said includes the “top five” experts in the region. The board includes 40 banks, including Standard Chartered, Abu Dhabi Islamic Bank, and Dubai Islamic Bank, among others.
“When we say this, people think that we are trying to indirectly centralise it but that’s not true because everything is welcome to put their project on our blockchain. But we have created something called the Sharia Oracle,” he explained.
“Once you put your project in our blockchain, it is decentralised, we cannot say no to anyone so long as the project is Sharia complaint. You would need to go through the Sharia Oracle.
First, the community would vote for it, then it will go to the Sharia court.
Once that’s happening, you get a badge or a sign that you’re screened and Sharia compliant.”—Arabian Business
