Is bitcoin halal? BSV Global Blockchain Convention takes a look at Islamic finance on the blockchain

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Bitcoin’s status in the Islamic community has been widely debated, with some saying it’s haram while others argue it depends on how it’s used. However, not much thought is given to how blockchain can enable a Sharia-compliant financial system. On day 3 of BSV Global Blockchain Conventionfour experts share their views on the intersection of Islam and blockchain.

Islamic finance emphasizes whether an element of the ecosystem adheres to Islamic teachings, Muhammad Mughal told the audience. For example, it prohibits interest on loans, added Mughal, who is the CEO of the AlHuda Center for Islamic Banking and Economics. Other practices such as gambling are also prohibited.

And while many non-Muslims may not be familiar with what Islamic finance is, Mughal revealed that it has grown rapidly and today is practiced in at least 120 countries and is valued at more than $3 trillion.

Digital asset entrepreneurs are well aware that Islamic finance is a large and profitable market to tap into. This has seen many claiming to be Shariah compliant to target Islamic investors, but as Zahid Mir told the audience, most of them are not halal projects but simply use marketing tactics to earn quick cash. the money. Mir is the CEO of Halalversean initiative that promotes halal blockchain projects to the Muslim community.

Any truly Sharia-compliant project is a step ahead of its rivals, that’s clear. However, “just because you’re a halal project doesn’t mean you’re suddenly going to be successful,” warned Khalid Howladar. He said being halal comes behind conventional strategies such as a great product and good marketing.

Howladar is the chairman of MRHB DeFi and a partner at startup consultancy Acreditus. Before getting into blockchain, he was head of Middle East banking at Moody’s.

Having worked with more than five dozen banks at Moody’s, Howladar believes the Islamic banking and financial system as a whole could benefit greatly from blockchain. One of the biggest applications will be in DeFi through which an average Muslim can confidently interact with another and exchange value.

“With blockchain, you can have peer-to-peer economic activity with end-to-end settlement, mobilizing micro-economies.”

There has always been the “yes to blockchain, but no to crypto” argument, and more so in the Islamic community. Panelists dismissed that argument, Howladar saying that if that’s your perspective, “you’re missing 50% of the value of blockchain.” Otherwise, it’s just a glorified database.

This argument against digital assets was led by traditional players in the Islamic finance industry, Dr. Farrukh Habib. Habib is an Islamic finance expert who is currently Chairman of the Shariah Governance Council and is also a co-founder of Shariah Experts. . He previously worked at the Central Bank of Malaysia for nearly a decade.

For these industry players, the biggest concern is “what happens to our Islamic monetary policy? What’s happening to the banking system?

Islamic Finance Panelist Standing at GBC 2022

For Muslims, identifying which projects are halal and which only pose as halal to bring together investors can be a tedious undertaking. And even when they make their assessments, they may find out later that they misjudged and end up losing their investment. This is exactly what happened to Mir and as he told the public, he ended up losing a considerable investment in the project.

This is why he started Halalverse which even identifies and organizes events for halal digital asset projects. Today, Halalverse gives Muslim investors confidence in the projects they invest in.

Howladar has a different view. For him, technology is neutral. As such, the question is not whether the blockchain and digital assets are halal, “just like no one asks if Microsoft Office is halal.”

“Intrinsically, it’s just technology. It’s that simple. What you do with it is what matters.

Through MRHB DeFi, it makes the world of decentralized finance available to Muslims in a certified Sharia-compliant manner. He sees huge potential in Islamic DeFi, which in its current state represents a close to zero percentage of the total DeFi market. This is despite the Islamic financial market being a $3 trillion giant.

Watch the BSV Global Blockchain Convention Dubai 2022 Day 1 here:

Watch the BSV Global Blockchain Convention Dubai 2022 Day 2 here:

Watch the BSV Global Blockchain Convention Dubai 2022 Day 3 here:

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