As a researcher exploring the intersection of technology and religious law, I’ve found that blockchain systems are particularly suited for adhering to Sharia Law, the Islamic legal code with stringent finance regulations. This is primarily because of their exceptional transparency, traceability, and decentralized governance structures, as highlighted by Web3 executive Mohemed AlKaff AlHashmi in an interview with CryptoMoon.
In simple terms, AlHashmi, who is one of the founders of Haqq Network – a blockchain system similar to Ethereum that follows Islamic law – clarified that practices such as lending money with guaranteed interest rates, usury, and gambling are considered prohibited (or “haram”) in Islam.
Per the executive’s statement, a reliable method for guaranteeing that income or funds originate solely from legitimate or permissible sources involves utilizing blockchain technology to authenticate transactions. In other words, by employing blockchain, one can verify and confirm that each transaction is indeed lawful, as explained by the co-founder of Haqq in an interview with CryptoMoon.
“If you look at the blockchain, it’s the most compatible technology with the Sharia’s ethics and values. When we talk about transparency, community governance, and traceability, the best tool to serve it is the blockchain.”
Approximately 2 billion individuals worldwide identify as Muslim, yet a significant number of them struggle to find suitable financial options for charitable contributions in accordance with their faith (zakat), equity-based housing loans that adhere to Islamic law (Sharia-compliant home financing), and investment strategies that meet these same religious standards (Sharia-compliant investment strategies).
Sharia-complaint crypto market growing
As a crypto investor, I’ve often found it challenging in the past to ensure that my income and investments align with Sharia principles, primarily because of technical constraints, the intermixing of funds by financial institutions, and the complexity of traditional financial systems which can be quite opaque.
According to AlHashmi, the market value for Islamic finance currently stands at approximately $4 trillion, and it’s projected to potentially double within the next five years.
A study conducted by Chainalysis in September 2024 revealed that the Middle East and North Africa region, which is predominantly made up of Muslim and Arabic-speaking countries, contributed approximately 7.5% to the total global volume of cryptocurrency transactions from July 2023 to June 2024.
2020 saw the establishment of Marhaba Network, an Australian fintech company, dedicated to offering Islamic financial solutions.
In the year 2022, I found myself part of a team who reported a significant market demand for cryptocurrency products that were halal-approved. Notably, our noncustodial Sahal Wallet had amassed more than 40,000 users at that time.
In simple terms, Bybit plans to launch a Crypto Islamic Account by September 2024. This development will enable users to trade Sharia-compliant digital tokens, pairs, and even automated trading bots, ensuring their transactions align with Islamic financial principles.
The statement also noted that the product was created in collaboration with Zico Shariah, a Malaysian firm focusing on Islamic law.
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2025-01-12 20:47