Last week I was interested to learn about the world’s first ever Shariah-compliant cryptocurrency exchange, which is set to be launched by ADAB solutions – a company based in the United Arab Emirates.
It’s been fascinating to watch the growth of Shariah-compliant finance in recent years. Shariah-based products have not just engaged with Fintech but have in many ways pioneered it too.
Traditionally, the values at the heart of Shariah-based banking (such as no interest) are also what has made it near-impossible for Shariah-compliant services to challenge traditional banking institutions in the products that they can feasibly offer.
But this is changing. Through their innovative use of financial technology, platforms like Yielders are helping to level the financial playing field. Often, Yielders products can are even able to offer better returns than most high-street banks.
The news marks another significant step for the UAE’s Fintech involvement. The country has been keen to increase its activity in digital currencies following the well-documented global success of Bitcoin.
A shariah-compliant cryptocurrency for all
The new cryptocurrency is appropriately named First Islamic Crypto Exchange (FICE) and will also operate on a global scale as it lucks to emulate some of that success. But just why is it needed? Well, While the likes of Bitcoin have gone from strength to strength, none of the existing cryptos out there are Shariah-certified and as such, they aren’t viable with the Muslim lifestyle. FICE will be hoping to onboard a percentage of roughly 1.8 billion Muslims around the world. The potential is certainly there, but only time will tell there is a place for crypto within the Muslim market.
ADAB solutions founder and CEO, Timur Turzhan, adds:
“Ideas that correspond to the norms of the Shariah are based on the understandable material value, have a clear business strategy, and this allows us to confidently assert that halal projects are incomparably safer successful than the many cryptocurrency initiatives.”
To ensure full compliance with the principles of Islamic legislation, FICE will employ its own in-house Shariah Advisory Board (SAB).
The rise of digital in the UAE
It’s been an exciting period for digital financial platforms in the UAE with Blockchain also beginning to thrive. Back in April, the UAE announced that 50% of government transactions will be conducted using blockchain technology by 2021, in accordance with the UAE Blockchain Strategy 2021. By the end of 2018, Dubai intends to have rolled out at least 20 blockchain-based services, with future plans for a Blockchain-based vehicle management system, which would allow for full transparency of the vehicle during the buying process.
It will certainly be interesting to see how these plans unfold. In the meantime, it’s great to Shariah-based products competing in influential financial markets. Hopefully, FICE can have a big impact in the crypto space!