Blockchain is the best fintech to ensure Shariah ethics – Web3 exec
Blockchain systems are the best way to ensure compliance with Sharia law – the legal code in the Islamic religion that includes strict regulations for finance – due to their high transparency, traceability and community governance structures, Web3 CEO Mohammed Alkaf Alhashmi told Cointelegraph in an interview. .
AlHashmi, co-founder of Haqq Network – a Layer-1 EVM compatible Sharia-compliant blockchain – explained that financial activities such as guaranteed interest rates, usury and gambling are “haram” or forbidden in Islam.
According to the executive, the best way to ensure that income or funds are obtained only from “halal” or legal sources is to use blockchain to verify transactions. The founder of Haqq told Cointelegraph:
“If you look at blockchain, it's a technology that is very compatible with Sharia ethics and values. When we talk about transparency, community governance and traceability, blockchain is the best tool to serve it.”
The world's Muslim population is now nearly 2 billion, and many Muslims do not have adequate financial solutions for halal donations – also known as zakat – equity-based home financing and Shariah-compliant investment strategies.
A fatwa or religious decree from Islamic Shariah scholars certifying Haq Chain and Islamic Coins as Halal Islamic financial products. Source fact
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Sharia-complaint crypto market is growing
Ensuring that income streams and investments are Shariah compliant has historically been difficult due to technological limitations, institutional liquidity and the lack of transparency of the legacy financial system.
According to Alhashmi, the Sharia finance industry is valued at around $4 trillion and is likely to double in the next 5 years.
According to a September 2024 report by Chainalysis, the Middle East and North Africa region – comprising predominantly Muslim, Arabic-speaking countries – accounted for 7.5% of the global cryptocurrency transaction volume between July 2023 and June 2024.
Marhaba Network, an Australia-based decentralized financial platform, was founded in 2020 with a focus on providing Islamic financial services.
In the year By 2022, the company said there was a huge demand for halal-approved crypto products, at which point the non-custodial Sahal Wallet had gathered more than 40,000 users.
Crypto exchange Bybit announced the release of its Crypto Islamic account in September 2024 — giving users access to Sharia-compliant tokens, trading pairs and trading bots.
The exchange also said the product was developed in consultation with Zico Shariah – Malaysia, a Shariah-based company.
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