A Report On What Are The Factors That Are Set To Save Crypto?
The article highlights the need for regulation from the Shariah. Read and get insight into the crypto ecosystem in the Middle East. It is quite interesting.
The Shariah And Cryptocurrency
Observed to be on a tumultuous journey since its creation in 2009 the cryptocurrency technology according to a recent New York Times article has bitcoin enthusiasts in the US wrongly predicting the involvement of the Wall Street institutions with investors in cryptocurrency as it would have given it legitimacy. The opposite effect has taken place where instead the big investors have avoided crypto because of the volatility shown by Bitcoin’s devastating drop in price.
Particularly in the Middle East along with countries elsewhere in the world and among major Muslim communities there is a growing curiosity about the cryptocurrency calling for regulation that deals with the stigmas against it. In this scenario, there are about 1.8 billion Muslims worldwide with the global Islamic economy coming with the inclusion of crypto tools, services, and products equating to approximately US $ 3 trillion and if able to work through the challenges, the implementation of crypto for the Muslim audience is the addressable market for crypto increasing exponentially.
Muslim leaders and communities since its inception have debated on whether or not the cryptocurrencies should be deemed halal or haram that is permissible or forbidden with the Shariah-compliant finance coming as a fundamental part of Islamic tradition with the primary reason as to why the Islamic countries are dubious of the new currency.
What Is The Challenge Of Shariah Compliance?
It is here that as they refer to finances and investments adhering to Islamic law, the Shariah compliance includes prohibiting riba or charged interest avoiding any unethical concern such as maisir (gambling), alcohol, and tobacco production, weaponry and even more. Thereby it is also prohibiting gimar, or the investments based on speculation as the crypto’s proven volatility is likened to gambling and speculation which is a critical reason behind the debate of halal and haram. Therefore, countries like those of Qatar, Saudi Arabia, and Jordan outrightly banned cryptos with concern over the legitimacy of crypto as thus far prevented the Middle East from truly embracing the technology.
The attitude around cryptocurrency in the Middle East began shifting as a relief for those paying attention where the UAE led the charge in nurturing acceptance of cryptocurrency in the region launching the strategy aiming for 50% of the government transactions occurring through the blockchain. The Cryptobulls Exchange the first cryptocurrency exchange in the UAE opened earlier gaining more than 200,000 traders as Ripple the top global blockchain platform plans to set up an office in Dubai and comes to be working with UAE Exchange which is the country’s largest remittance firm to setup blockchain-based payments in Asia
How Are The Companies And Institutions Approaching Compliance
Then for the development of the Shariah-compliant crypto and the blockchain services additionally began to weave a new narrative which is an essential one reconciling and compromising with the tenets of Islamic tradition. Cryptocurrency and finance platform Stellar had earlier permitted to integrate and service financial institutions in the Middle East as it is observed according to The Shariyah Review Bureau leading the international advisory agency licensed by the Central Bank of Bahrain as a result of the compliance to the Shariah law in its practices. In this context the Swiss-based start-up X8 AG well known for its fiat-backed crypto also received certification from the SRB, demonstrating that fiat supported currencies are more appealing to Islamic countries.
It has already seen the launch of meem Bahrain’s first fully digital bank and the first Shariah-compliant digital bank in the region even more recently. Moving on it was also seen that the launch of Qintar the first crypto token that was expressly made to be Shariah-compliant built on their Islamic Blockchain (ISL) receiving fatwa of approval from the Islamic scholar's ad researchers as the ISL is secured and speedy with full transparency allowing the users to thereby safely control their trades ensuring that their transactions follow restrictions like riba or maisir.
Why Has Shariah Compliance Hit The Ground Running
In the past few years, the swift, sweeping movements towards Shariah compliance is paving the way for wider adoption of technology as well as increased mindfulness and inclusion of the way business is being conducted in different cultures with the establishment of the new institutions playing a part in the Shariah-compliant crypto ecosystem such as banks and exchanges helping build up the regulated foundation. Therefore, they keep the cryptocurrency stable providing a vetting process for the projects thereby deemed halal or haram.
The development and counsel of Shariah advisory boards are of course in various forms not only lending legitimacy but also keeping companies accountable in enforcing the rules with approval from Islamic scholars as well as experts working to lift the stigmas of cryptocurrency in the region and the culture.
Thereafter it becomes evident for the cryptocurrency and blockchain beginning to earn the favor of the Islamic countries with the necessary steps being made to make the blockchain and crypto Shariah-compliant as they have therefore the increasing acceptance of the new fintech among Muslim people.
Finally Closing Down The Discussion
Representing a significant 23% of the total population, the nearly two billion Muslims in the world are being included in crypto ventures through Shariah-compliant regulation as seen by crypto finally becoming the economic system it deserves to be.