Is Halal Cryptocurrency Feasible for the Global Financial System?

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Dr Mohamad Akram laldin, professor in ISRA’s Discussion: Kuala Lumpur Summit 2019 was organized last week which was attended by leaders across the world. The leaders attending the meeting called on all Muslim nations to strengthen financial and trade cooperation and reduce their dependence on the U.S. dollar. Notable leaders that attended the summit were Iranian President Dr Hassan Rouhani, Turkish President Recep Tayyip Erdogan and Prime Minister TuTun Dr Mahathir Mohamad.  All the leaders discussed and debated the idea of a unified currency as one of the ways to confront and challenge the economic dominance of the US.

Muslim leaders believe that halal coin is a realistic approach and can be introduced into the financial system. This can indeed be a reality if all the stakeholders come together and join hands. The regulators that can make this developments come to life are the government, financial technology entrepreneur and the Islamic finance ecosystem. Dr Mohamad Akram laldin who is a professor in ISRA (International Shariah Research Academy) said that the digital currency has attracted a variety of ruling from scholars and academicians. Most of them have differing view on how these crypto will fit with Islamic principles that emphasize real economic activity and forbid outright monetary speculation.

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In an interview given to The Malaysian Reserve he told that the halal coin could become a reality if some of the governments first include it in their financial system. This will give encouragement to other Muslim nation to introduce this financial asset into their financial system. Mohamad Akram believes that the biggest hurdle that lies ahead for halal Cryptocurrency to come to life is the ability and the capacity of the regulators, scholars and standard setting bodies. According to the professor the biggest advantage of having the halal Cryptocurrency is that it would be immune to exchange rate fluctuation which is the case of all the paper currency or the fiat currency as it is popularly known. He went on to add that the Shariah authorities have not ruled out the possibility of the introduction of this new Cryptocurrency despite many international bodies supporting the move in favor of the introduction.

He also told that with advice coming from different bodies which have supported the move, but none have the authority to force this decision on the financial body. There are a number of global financial institutions who have lately thought of creating and introducing Cryptocurrency so that they can dodge United States sanctions that the country has introduced on them. The countries which face the brunt of the U.S. sanction and have launched their own Cryptocurrency is North Korea, Venezuela to name a few. North Korea has already introduced its own digital currency so that the nation can trade with other countries.

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The other country in the list is the rich oil producer nation of Venezuela. The nation is trying to circumvent the US sanctions by using its own crypto. The nation’s patent crypto was launched in February 2018. Petro is the world’s first oil backed Cryptocurrency. Companies are seeking to sway the debate by introducing their own instruments based on physical assets and certified as valid by Islamic advisors. In Malaysia, HelloGold Sdn launched an initial public offer of its gold back Cryptocurrency in October. It received approval from the Islamic scholarsat Kuala Lumpur based Amanie Advisors Sdn Bhd. The Chief marketing Officer of the HelloGold Sn Manuel Ho said that its coin ius Islamic as transaction occur with a defined period, making them less volatile and addressing the issue of ambiguity of pricing.

Source: The Malaysian Reserve


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