IslamicCoin (ISLM) and HAQQ blockchain – the definitive guide from haqq.community  

According to Dr Anas Iqtait, an expert on Islamic Finance from the Australian National University, in order for Islamic Coin to gain widespread adoption, it must demonstrate its substantial usefulness. Similar to Bitcoin, the appeal of Islamic Coin will not necessarily be enhanced solely by its adherence to Islamic law. While this is certainly a favorable aspect, it does not define its appeal.

Dr Iqtait does not doubt the potential benefits and practicality of Islamic Coin, nor the vision of its founders. He recognizes that while the crypto sector is still in its early stages, it holds immense potential for growth and consolidation by 2030. Therefore, it is crucial for the Middle East to play a leading role in capitalizing on the innovative and economic potential of this burgeoning sector.

Islamic Coin (ISLM), a digital currency strictly adhering to Sharia laws, is expected to make its debut on September 1, 2023. Its inventors are optimistic about revolutionizing the realm of Islamic finance. This piece aims to shed light on its purpose, the potential challenges it may face, and the scope of its influence. With a target audience of approximately 2 billion Muslims globally, the sheer demographic weight could potentially elevate this cryptocurrency to a prominent status. However, will it manage to win the hearts of its intended audience?

As of July 2023, Islamic Coin has succeeded in securing a staggering US$400m (AU$580.8m) in investment. While such an impressive funding round doesn’t ensure a smooth ride to success, it undoubtedly puts Islamic Coin on the radar as a cryptocurrency to keep an eye on.

A Primer on Islamic Coin (ISLM)

In a digital universe teeming with around 22,932 cryptocurrencies as per CoinMarketCap, the vast majority have been consigned to oblivion or exist in a dormant state. Out of this multitude, just over 8,000 cryptocurrencies are currently active. Entering this crowded arena is the newcomer, Islamic Coin, which needs to distinguish itself with a unique value proposition – and it appears to have one.

Designed with the ethos of adhering Muslims in mind, Islamic Coin addresses a potentially enormous market estimated to range between 1.2 billion and 2 billion individuals globally.

Islamic Coin (ISLM) is a unique digital asset that stands out by aligning itself with the principles of Sharia law, making it the inaugural Sharia-compliant cryptocurrency.

This cryptocurrency is slated for release on September 1st, with its issuing entity, Haqq Blockchain, set to utilize the substantial US$400m funding it has amassed to roll out Islamic Coin across the Middle East and North Africa (MENA) region.

Understanding Sharia Compliance in Finance

In the context of finance, Sharia compliance necessitates adhering to certain Islamic law principles. But what does this concretely mean in financial terms?

-Islamic principles forbid both charging and paying interest, instead promoting arrangements based on profit-sharing or risk-sharing.

-Transactions that are uncertain or ambiguous are prohibited. Contracts must have explicit terms and conditions, ensuring all parties involved understand the possible outcomes.

-Activities resembling gambling or speculation, where gains rely more on chance than on actual trade, are disallowed.

-Funding activities or businesses considered haram (forbidden) in Islam, such as those related to alcohol, gambling, pork, and unethical business practices, are not permissible.

-Businesses are expected to be socially responsible, contributing positively to society’s well-being and the environment.

-Transactions should be backed by real, tangible assets.

-Excessive risk-taking is discouraged in favor of moderation and caution.

-A portion of profits should be allocated towards charitable causes, reflecting the Islamic value of Zakat (charity).

Sharia-compliant finance offers an alternative financial system that respects Islamic values while providing diverse financial services. It is these principles that Islamic Coin intends to incorporate when it launches its cryptocurrency.

While these principles sound plausible in theory, it’s crucial to consider the practical implications. Recent studies have indicated a shift in religious adherence, particularly among young people in certain Middle Eastern countries, including Iran. The question then arises: will being Sharia-compliant be sufficient to secure popularity for this coin?

Expert Perspectives

Dr Anas Iqtait, a specialist in Islamic Finance at the Australian National University, weighs in on the matter. “For Islamic Coin to carve out a substantial niche, it needs to prove its tangible benefits. Similar to Bitcoin, its compliance with Islamic law will not necessarily be the primary driver of its appeal. It’s a beneficial attribute, certainly, but not a decisive one.”

While Dr Iqtait doesn’t challenge the potential advantages and practicality of Islamic Coin or the founders’ vision, he acknowledges the promise of the crypto sector. “Though still in its infancy, the crypto industry possesses substantial potential for expansion and establishment by 2030. It’s crucial for the Middle East to spearhead the exploitation of the innovative and economic potential of this rapidly evolving sector.”

On the other hand, Eli Taranto, a finance industry executive based in the United Arab Emirates, voices his personal endorsement of Islamic Coin. Please note that this viewpoint is independent of his professional stance. “From my perspective, this community differs from your typical crypto audience — it has already burgeoned to over 1 million. The transition from a minimum viable product (MVP) to a fully functional platform was impressively swift. With an intriguing team and a crucial emphasis on ethics, Islamic Coin may well serve as a hedge against other cryptocurrencies.”

Understanding Fatwa

Islamic Coin has recently received a fatwa, or an authoritative legal opinion, in favor of its activities from Sheikh Dr. Nizam Mohammed Saleh Yaquby, who is often referred to as ‘The Gatekeeper’ of trillions of dollars in Islamic financial products.

A fatwa is essentially a religious ruling or ‘opinion’ issued by a qualified Islamic scholar, asserting that a certain practice or product is in line with Sharia law. Now, with the acquisition of this fatwa, Islamic Coin claims to have gained recognition and is prepared to revolutionize Islamic finance.

Although a positive fatwa doesn’t carry legally binding authority, it can instill confidence that the subject of the fatwa complies with the principles expounded in the Quran and Islamic teachings. However, consensus on the fatwa’s validity isn’t universal among all Islamic authorities capable of issuing fatwas. For instance, Muslim scholars in Indonesia have not yet sanctioned any cryptocurrency as being Sharia-compliant.

Islamic Coin aspires to persuade practicing Muslims that adopting this cryptocurrency can result in financial empowerment for the Muslim community while preserving Islamic values through blockchain technology and innovation. Whether it will succeed in accomplishing this vision is something only time will reveal.

Prominent Figures Behind Islamic Coin

The team guiding Islamic Coin constitutes a diverse and intriguing blend of expertise. Leading the pack is Mohammed Alkaff, a computer science engineer and Co-Founder of ISLM.

Sheikh Dr. Nizam Mohammed Saleh Yaquby, a renowned authority in the US$4.2 trillion Islamic financial market, is another notable figure involved in the project. Also contributing his expertise is Hussein Mohammed Al Meeza, an Islamic banker affiliated with the Dubai Islamic Bank.

The team also includes Peter Raffety, a fund manager at the Abu Dhabi Investment Authority. Adding a touch of royalty to the mix, Her Highness Sheikha Mariam Suhail Obaid Suhail Al Maktoum from Dubai’s ruling family also holds a position in the organization, among other distinguished individuals.

The Haqq Blockchain and proof-of-stake mining

ISLM operates on the Haqq blockchain, which they say is an “ethical Web3”, designed to be autonomous, immutable, and independent. The blockchain is built on the concept of proof-of-stake (PoS) mining, so that Islamic Coin is decentralised. PoS mining makes sure that energy consumption is low, compared to Bitcoin’s proof-of-work method.

According to the ISLM whitepaper, there will be a final total of 100 billion tokens. The initial release (which they call the genesis block of Islamic Coin), has 20 billion tokens. There will be a gradual reduction in new coins being created over time, and production will stop once the total hits 100 billion tokens. This, according to the white paper, will create scarcity, value, and prevent excessive inflation.

Every two years, known as an Era, the emission rate (new coins being created and released) will decrease by 5%, until it stops at 100 billion. It is estimated that this will happen 100 years from the first block of the first Era.

Charitable Contributions and Potential

Farid highlights another commendable aspect of this cryptocurrency: with every minting of the Islamic Coin, 10% of its value is reserved for charitable causes and the upliftment of the Muslim community. However, it’s the potential of the coin that particularly captivates him.

“If a mere 3% to 4% of Muslims engaging in cryptocurrency trading adopt Islamic Coin, it could achieve a stature akin to Bitcoin in terms of popularity. In such a scenario, its value could skyrocket to $1 trillion, implying that $100 billion would be allocated for community services and charitable endeavors.”

Farid strongly believes that the Muslim community should embrace the world of crypto, particularly Islamic Coin. “We ought to continually research this domain so as not to lag behind the global trend. It’s crucial for us, as Muslims, to comprehend the cryptosphere and leverage it for the betterment of our community.”

Islamic Coin’s Advantage over Bitcoin

Bitcoin, with its superior market capitalization, remains the most popular and widely adopted cryptocurrency. It has already secured a foothold in real-world transactions, so one might question why Muslims would opt for Islamic Coin over Bitcoin.

One possible reason could lie in the fact that various Muslim authorities have labeled Bitcoin as “haram” (not permissible). Islamic Coin, with its unique proposition of being Sharia-compliant, stands apart from other cryptocurrencies. This Sharia adherence might just be the differentiating factor that grants Islamic Coin a competitive edge in appealing to the Muslim population.

Problems

The volatility and speculative nature of cryptocurrencies may introduce risks for investors, especially if non-Muslims buy the coin and trade it in ways that don’t match the principles that it was created under. This will contradict the principles of Islamic finance, as set out above. While Islamic Coin presents a promising path for those seeking a Sharia-compliant cryptocurrency, there is no guarantee that it will be used as intended.

Islamic Coin’s founders have set wildly ambitious goals for the currency’s adoption. They say that if even just 4% of the one billion Muslim internet users opt in, Islamic Coin could achieve a market value exceeding $1 trillion. This puts it alongside the market cap of the world’s biggest cryptocurrency, Bitcoin. For a new coin, these ambitions sound lofty.

Expert Perspective

Dr. Iqtait’s stance on cryptocurrencies, particularly those claiming Sharia compliance, pivots around their potential to captivate an Islamic audience. “In my opinion, possessing a religious endorsement or fatwa might not be enough to broaden their appeal beyond the group already interested in such cryptocurrencies. I harbor some doubts regarding the expansion to a wider audience that’s not yet invested in cryptocurrencies. Globally, religious bodies vary in their views on cryptocurrencies. Some consider Bitcoin ‘halal’, or permissible, while many notable, government-affiliated religious institutions deem them as ‘haram’, or forbidden.”

Dr. Iqtait points out a key contention among Islamic religious scholars: for any currency to gain acceptance, it should represent a state institution, meaning it should have ‘sovereign backing’. “This is a feature that cryptocurrencies like Bitcoin and the proposed ‘Islamic coin’ lack. Despite Islamic Coin being reportedly based in the blockchain-friendly environment of Dubai, it doesn’t possess the necessary institutional (‘sovereign’) backing. I wonder whether Islamic Coin could attract more adherents beyond the current investors, particularly since the Middle East is one of the fastest-growing crypto markets globally, despite stringent regulations and Islamic prohibitions.”

Dr. Iqtait underscores that the use of cryptocurrencies in the region, as seen in countries like Lebanon, Egypt, or Turkey, isn’t because they’re Sharia-compliant but because of their economic utility. “In nations such as Lebanon, enduring economic crisis, cryptocurrencies have served as a means to transfer funds and counteract the dollar shortage, catalyzed by the depreciation of the Lebanese lira. Despite my personal beliefs, it’s important to highlight that the majority of Muslim scholars and established religious institutions have prohibited cryptocurrencies, labeling them as speculative assets not tied to sovereign or state institutions.”

Women’s Role in the Islamic Coin Ecosystem

Dr. Nada Ibrahim, whose expertise spans criminology, psychology, Islamic psychology, Islamic studies, and education at the University of South Australia, points out that maintaining Sharia compliance is an ongoing task, not a static one.

“Sharia compliance must be continuous because you can’t predict what will come up until something has been implemented. How will it respond to new challenges? For instance, we didn’t anticipate the impact AI would have on society. We don’t yet fully understand everything about AI, its consequences or implications, and we won’t for some time. The same applies to Islamic Coin. The question is about what will happen once it gets launched. A whitepaper can seem very promising, but until it’s launched, we won’t truly know.”

As for women’s involvement with ISLM, if the coin adheres to Sharia principles, Dr. Ibrahim suggests that women will be able to manage their finances in the same way they do with traditional Sharia-compliant finance.

“From the standpoint of Islamic jurisprudence, women and men are independent in terms of managing their own finances. A woman’s property is meant to be distinct from a man’s property; there is no joint ownership. Even when a woman gets married, her property should remain separate from the man’s. So, if Islamic Coin is genuinely guided by Sharia, it would go against its principles to prevent women from using it.”

Islamic Coin: The Final Word

Islamic Coin stands to potentially disrupt the crypto scene. By aligning its features with the needs of observant Muslims and complying with Sharia law, it may have the distinct edge required to break through as the next significant crypto player.

Nevertheless, consensus is not universal, as not all Muslims concur with its principles, nor do all Muslim authorities agree with the fatwa issued. These varied views could impact its adoption. Moreover, Islamic Coin will be vying with long-standing Islamic financial systems and institutions that already comply with Sharia principles.

In a public statement, ISLM Co-Founder Mohammed Alkaff expressed, “We take pride in creating and launching a Sharia-compliant, immutable, independent financial system that caters to the Muslim community and beyond. We are developing a stable pillar, embedded with values that are future-proof in an ever-changing world.”

By the fourth quarter of 2023, the project anticipates to have integrated with 20 payment companies in the Middle East and North Africa (MENA) region.

Could Islamic Coin topple Bitcoin to become the dominant crypto? Or will it eventually fade into anonymity, like so many other aspiring cryptos before it? Only time will tell.