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“Islamic Coin has received a Fatwa, verifying its status as a Sharia-compliant cryptocurrency,” says Co-Founder Mohammed AlKaff AlHashmi.

The Shariah compliance of Islamic Coin is validated by a Fatwa, obtained from professionals in banking and finance.

Mohammed AlKaff AlHashmi, co-founder of “Islamic Coin,” suggests that as cryptocurrencies prove themselves as a store of value or a medium for transactions, they will gain greater acceptance as “Shariah-compliant” among Muslim scholars. AlHashmi also notes that the ethical principles in Islam are “robust” enough to incorporate modern technologies like blockchain and cryptocurrencies. This perspective may account for the growing acceptance of digital assets not backed by tangible goods within some segments of the Islamic community.

Cryptocurrency Acceptance in Islamic Communities

Although there’s been a shift in how cryptocurrencies are perceived in the Islamic world, many digital tokens with Islamic themes have not been able to replicate the success of foundational coins like Bitcoin (BTC) or Ethereum (ETH). In a different vein, Mohammed AlKaff AlHashmi’s “Islamic Coin” has secured significant financial backing, as demonstrated by the recent $200 million investment from ABO Digital.

AlHashmi attributes the project’s relative success to its comprehensive approach, which he says “expands our reach and enhances our value proposition.” He views the substantial funding as a clear indication of the Islamic community’s endorsement of his approach.

However, only some are convinced. Critics of “Islamic Coin” argue that it does not genuinely comply with Sharia law, accusing AlHashmi and his team of using deceptive tactics to attract faithful Muslims. In response to these criticisms, AlHashmi told News that such claims “miss the fundamental essence and principles behind our project.” He further elaborated on the features of “Islamic Coin” that, according to him, substantiate its compliance with Sharia law.

AlHashmi’s detailed answers to questions posed via LinkedIn are provided below. News (BCN): Islamic Coin seems to have been enjoying a rather successful year, from securing a $200 million investment from Alpha Blue Ocean’s ABO Digital to collaborating with Republic Crypto for a token sale. What factors contribute to Islamic Coin’s ability to garner this level of support, especially when many other projects have struggled?

Mohammed AlKaff AlHashmi (MKH): The robust support that Islamic Coin has received can be traced back to our unique, multifaceted strategy that distinguishes us in the crowded world of cryptocurrencies. Unlike projects that target only those familiar with crypto, Islamic Coin is designed to bridge crypto-savvy individuals and those new to digital assets. This expands our audience and strengthens our value proposition.

Beyond simply offering a cryptocurrency, we’re developing a comprehensive ecosystem that aligns with Shariah principles. This approach resonates with a worldwide Muslim audience estimated at around 1.9 billion. Our vision is for Islamic Coin to be more than just a financial tool; we want it to be an integral part of daily life, affecting everything from social engagements to healthcare services.

The financial backing and support we’ve received can be seen as validation of our groundbreaking approach and the transformative impact we aim to have in the digital asset arena. Investors see the immense potential in a project that aligns with ethical guidelines and serves a large and mostly untapped market.

BCN: Several years ago, key Islamic organizations and governments cautioned Muslims against engaging in virtual currencies. Various so-called Islamic cryptocurrencies are available on exchanges, which some interpret as a form of endorsement. Do you agree with this viewpoint?

Islamic Coin received a Fatwa

MKH: The change in perspective towards cryptocurrencies within the Islamic world is multi-layered. Initially, there was caution, as is often the case with emerging technologies. However, as understanding deepens, attitudes tend to shift more positively, leading to greater acceptance and adoption.

In Islamic financial doctrine, traditional currencies are generally expected to be backed by tangible assets, such as gold or silver. Many digital currencies operate more like financial assets than conventional currencies. They serve as stores of value and mediums for exchange, and their valuation often depends on community acceptance. When considered in this light, scholars increasingly conclude that these digital assets can align with Shariah law, provided they aren’t used for activities that conflict with Islamic tenets like usury or trading in forbidden substances.

The ethical framework of Islam is sufficiently flexible to integrate modern technological advancements like blockchain and cryptocurrencies. As this awareness spreads, what was once resistance often becomes acceptance in Islamic circles and, more broadly, across societies.

Furthermore, an increasing number of Islamic scholars and financial institutions are researching the functionalities of blockchain technology—such as smart contracts, transparency, and community governance—and are finding that it meshes well with the guiding principles of Islamic finance. This has led to a more positive perspective on digital assets within the Islamic community, laying the groundwork for wider acceptance and use.

So, the shift in attitudes is less an explicit endorsement and more an evolving understanding fueled by increased awareness, technological progress, and the realization that digital assets can be harmonious with Islamic values.

BCN: How do you view the differences in the regulatory environment between the MENA region and Europe, where your project is based?

MKH: The regulatory landscapes in the MENA region and Europe are unique, each influenced by socio-economic, cultural, and political dynamics. Europe is often considered a benchmark for financial innovation, but it has its own challenges, as the 2008 financial crisis showcased. That crisis served as a reminder that an interest-based financial system can also be vulnerable to downturns.

On the other hand, the Islamic financial system common in the MENA region has shown resilience due to its community-focused ethos. For example, in 2015, Islamic financial entities in Jordan experienced a -0.9% inflation rate even as the rest of the world saw inflation rates exceed 7.1%. This highlights the stability inherent in an interest-free financial system prioritizing community welfare over mere profit generation.

However, the Islamic financial model has not been fully integrated into modern technological frameworks, a gap that Islamic Coin aims to bridge. We hope to stimulate the growth of more Shariah-compliant fintech initiatives in the market.

BCN: Some skeptics argue that Islamic Coin’s Shariah compliance cannot be verified. What assures you that your project adheres to Islamic law, and why is this important?

MKH: The Shariah-compliance of Islamic Coin is validated by a Fatwa, a vital Islamic legal ruling obtained from esteemed Islamic scholars and professionals in Islamic banking. This Fatwa is a rigorous endorsement of the Coin’s alignment with Shariah principles, far beyond being just a ceremonial seal of approval. In addition, Islamic Coin operates on a profit-and-loss sharing mechanism, which is consistent with Islamic finance’s prohibition of interest-based transactions.

The HAQQ blockchain, which powers Islamic Coin, provides transparent and decentralized transaction records, ensuring further adherence to Shariah principles. Our commitment to these tenets offers a truly Shariah-compliant pathway for the global Muslim community to engage with digital assets, harmonizing modern financial practices with ethical Islamic principles.

BCN: Critics also accuse you of using the Islamic label merely as a way to attract devout Muslims to invest in the coin. How would you respond to such criticisms?

MKH: Such criticisms misunderstand the foundational ethos and architecture of our project. Thanks to blockchain technology, every facet of Islamic Coin, from its smart contracts to financial transactions, is transparent and open to public scrutiny. This includes our claim to Shariah compliance, which is backed by easily verifiable Fatwas and is publicly accessible on our website.

We’ve even implemented a Shariah Oracle to vet decentralized applications (dApps) developed on the HAQQ blockchain, ensuring that they align with Islamic principles, thereby adding an extra layer of trust and compliance.

Islamic Coin is not an exclusive financial product; it’s an inclusive instrument rooted in Islamic ethics. Everything from its profit-and-loss sharing mechanisms to its transparency and community contributions is designed to align with Islamic principles. Additionally, a portion of the coin’s proceeds is directed towards Islamic charitable endeavors and projects, in keeping with the Islamic principle of zakat, one of the religion’s core pillars.

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