Islamic scholars have for years been debating the validity of cryptocurrencies. In 2018, Reuters reported, the world’s top Islamic finance scholars scrutinized the nascent space as debate as to whether the new technology follows Islamic values.
Islamic laws that govern religious rituals and aspects of day-to-day life have raised seen scholars share their concerns surrounding crypto assets. Religious permissibility could help determine whether Islamic financial institutions can enter the cryptocurrency space and help financial inclusivity growth throughout the world.
Over the time some Islamic scholars, including the Grand Mufti of Egypt, Shaykh Shawki Allam, have argued that crypto does not follow the religion’s values as there’s a high degree of uncertainty and risk in the space and is often associated with criminals and other nefarious elements. Others, including Mufti Muhammad Abu-Bakar, pointed out crypto does follow its value and argued Bitcoin and other cryptos are permissible.
A new cryptocurrency has now been launched to settle the debate while promoting financial inclusivity in the Muslim and non-Muslim world: Caizcoin. The cryptocurrency aims to provide financial solutions that allow everyone in the modern world to participate in the financial system while complying with Islamic values.
The first Islam-compliant Cryptocurrency
According to their whitepaper Caizcoin is the first cryptocurrency that follows Islamic Financial Law and was initially launched on the Ethereum blockchain but will soon launch on its mainnet to provide unique identifiers for Waqf and Zakat donations – donations associated with giving to charity and allow Muslims to devote their faith.
The cryptocurrency’s whitepaper details it’s anonymous for all users and it is using a blockchain technology to create a financial system reliable for everyone. Just like most other cryptoassets, it allows for quick and cost-efficient international transactions.
Behind the coin is a team of Muslim and non-Muslim professionals who work to ensure Caizcoin remains associated with Islamic values while being an open blockchain. This means it does not work with companies associated with industries incompatible with Muslim values.
On its website, it details the use of wallets and exchanges is compliant with Islamic financial standards and allows for credit lines complying with its ethics. It has its own wallet and is currently available for trading on the decentralized trading platform Uniswap, an Ethereum-based AMM exchange with plans in the future to launch on 1Inch, Binance, and Huobi.
Caizcoin has launched an API to allow for easy third-party integrations. Credit cards, wallets, vendors and other organizations are incentivized to adopt it, boosting financial inclusion for the Islamic world.
Cryptocurrencies have long been heralded as a tool for financial inclusion with Bitcoin allowing people to be their own bank without relying on a centralized entity which could dictate who they transact with based on arbitrary factors.
While transaction fees are applied, Bitcoin is agnostic when it comes to compliance with values of different cultures and religions. Little advances have been seen on whether cryptocurrencies were considered acceptable in the Islamic world.