If cryptocurrencies are to gain the global acceptance necessary to expand and prosper, can the industry achieve that goal by ignoring 23% of the inhabitants on our planet? In much the same manner as the retail foreign exchange trading industry created special Islamic accounts and processes that were in compliance with Shariah law, it would be prudent for the crypto industry to adapt in a similar fashion to accommodate the specialized needs of 1.8 billion Muslims across the world.
Sulaiman al-Fahim, an international businessman based in Dubai with focuses on property management/real estate, cryptocurrency, and philanthropy, supports this line of reasoning, and, as an advisor and partner at ADAB Solutions, he and his group are dedicated to bringing the newest movement in financial tech to the Muslim world. His perspective is simple and straightforward:
If we are able to work through the challenges and implement crypto for a Muslim audience, the addressable market for crypto could increase exponentially.
The issues with forex trading were many, since Shariah compliance prohibited “riba”, or charged interest, which is common when forex positions are held overnight. Perhaps, of even greater importance was the avoidance of more unethical concerns, having to do with “maisir” (gambling) or “qimar” (investments based on speculation). These same issues are central to the ongoing debate within Muslim communities, as to whether those of the Islamic faith can embrace cryptocurrencies.
As Sulaiman al-Fahim points out: “Since its inception, Muslim leaders and communities have debated on whether or not cryptocurrencies should be deemed “halal” or “haram”, permissible or forbidden. Shariah-compliant finance is a fundamental part of Islamic tradition, and it’s the primary reason why Islamic countries have been so dubious of the new currency”. To date, Qatar, Saudi Arabia and Jordan have outright bans on cryptos, and legitimacy concerns of cryptos with respect to Shariah law currently stand in the way of nearly all countries in the Middle East from truly adopting all things crypto.
But, as with government officials and regulatory authorities across the globe, there is a shift in thinking in the Middle East, a more receptive and accommodating point of view. The United Arab Emirates (UAE) has assumed a pioneering role by “nurturing an acceptance of cryptocurrency in the region, and launched a strategy that aims for 50% of all government transactions to occur through blockchain”. The Cryptobulls Exchange, the first cryptocurrency exchange in UAE, opened its doors for business last year and has logged more than 200,000 traders. The UAE Exchange, the country’s largest remittance firm, is working with Ripple to provide cross-border payment support to Asia.
These initiatives are not the only ones. Projects exist in the region for its first digital bank and a fiat-based stablecoin token that is Shariah-compliant, all to be built on the bank’s Islamic Blockchain (ISL). Islamic scholars and researchers have already provided their approval. The Shariyah Review Bureau (SRB), a leading international advisory agency licensed by the Central Bank of Bahrain, has also given its blessing to stablecoin approaches, indicating that “fiat-supported currencies are more appealing to Islamic countries”.
Sulaiman al-Fahim concludes: “These swift, sweeping movements toward Shariah compliance in the past few years are paving the way for a wider adoption of the technology, as well as an increased mindfulness and inclusion of the way business is conducted in different cultures. The establishment of new institutions that all play a part in a Shariah-compliant crypto ecosystem, such as banks and exchanges, help build up a regulated foundation that can keep cryptocurrency stable and provide a vetting process for which projects will be deemed halal or haram.”