As blockchain technology slowly gains adoption around the world, the global Muslim population to get their first cryptocurrency ecosystem that abides by the principles and traditions of Islam with the launch of the Islamic Coin ($ISLM), the native coin of the Haqq ecosystem.
Islamic finance has experienced global popularity, with Islamic banks and financial institutions operating in various countries. Still, the absence of Shariah-compliant services has traditionally limited the options available to devout Muslims. For this reason, there has been a surge in interest in financial products with high ethical potential, including those based on blockchain technology and cryptocurrencies.
Halal financial platforms and cryptocurrencies are on the rise, with the introduction of the first Shariah-compliant cryptocurrency based on the Haqq Blockchain. Known as Islamic Coin ($ISLM), the crypto’s objective is to provide an ethically-centered financial alternative with integrated charitable elements. Yet what sets the coin apart is its commitment to empowering the global Muslim community through a halal financial instrument designed for the digital age.
Blockchain and Crypto: A Key to Shariah Compliance?
The stance of Islamic scholars and the issuance of fatwas or religious rulings regarding cryptocurrencies significantly influence the adoption and perception of cryptocurrencies within the Muslim community. Shariah councils of respected religious leaders influence government policies and provide guidance for religious Muslims, while their views on cryptocurrencies with Islamic principles impact the acceptance and engagement of Muslims in the crypto market.
Yet the potential impact of the Islamic world’s adoption of cryptocurrencies extends beyond individual investments. Muslim-majority countries have large amounts of sovereign wealth, and while these funds are not restricted to only Shariah-compliant assets, a portion of their investments adheres to Islamic finance principles. Their involvement in the cryptocurrency market could notably affect market dynamics and the technology’s future.
Cryptocurrencies can present certain aspects that align with Shariah principles. The absence of interest or riba and the potential for increased efficiency and reduced friction in terms of costs are appealing features from a Shariah-compliant perspective. These aspects may attract Muslims seeking financial solutions that adhere to Islamic principles as well as non-Muslims interested in unorthodox financial methods.
$ISLM: Meeting Ethical Standards
To maintain compliance with the Islamic financial ecosystem, a new token targeted at the Islamic world had to be transparent and provide clear information about its underlying assets, ownership rights, and transaction processes. Islamic Coin team relied on the support of a dedicated Shariah board to offer guidance over the token’s implementation.
The value of Islamic Coin is solely determined by the market, ensuring fairness in its pricing. Unlike traditional fiat currencies, Islamic Coin operates independently of profit-driven banks that rely on interest charges. When new Islamic Coins are minted, a generous 10% of the issued amount goes to the Evergreen DAO non-profit virtual foundation. This allocation serves a dual purpose: supporting Islamic internet projects and making contributions to Islamic charities.
Andrey Kuznetsov, the CTO of the Haqq Association, emphasizes that Islamic Coin goes beyond charitable contributions. It also prioritizes reducing the carbon footprint of crypto-related ventures. With a proof-of-stake structure, participating in the Islamic Coin network requires the purchase of tokens. This approach stands out for its energy efficiency compared to other consensus processes.
The Bridge Between Crypto and Traditional Finance
Haqq Co-Founder Mohammed Alkaff Alhashmi believes that if just 3-4% of the global Muslim community holds the coin, it could have the potential to achieve a level of success similar to Bitcoin. This ambitious objective has already attracted an impressive $200 million, which is all the more notable considering the challenging market conditions of the previous year.
ICNetwork Ltd — the developer of HAQQ Blockchain — has introduced the first Shariah-compliant decentralized ledger explicitly designed to adhere to the rules and traditions of Islamic finance. It is a privately-financed technological enterprise established by a group of experienced blockchain and fintech entrepreneurs committed to creating ethical financial services.
With Islamic Coin, Haqq Foundation, and ICNetwork working on a common vision and ethics-first mission, the new token is uniquely positioned to be the primary coin of over 2 billion Muslims worldwide. The theme of ethics is likely to attract those outside Islamic finance as well, indicating at least a strong amount of interest will follow the token’s release.
Whatever the future holds for this distinctive cryptocurrency, it will surely make a splash in both Islamic and digital finance.
