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Murabaha in the blockchain: traditions and high technologies serving people

One of the main elements of Islamic finance is Murabaha, which forms the basis of the Islamic banking system. Literally, the term “Murabaha” means an increase in capital or profit. Technically, this is a special type of sales, in which the seller discloses the cost of the product and the margin when it is sold. A distinctive feature of such transactions is that the seller directly tells the buyer how much he has incurred and what profit he is going to get. Murabaha is considered as a trust transaction, at the conclusion of which the buyer knows exactly the cost of purchasing the goods and the profit received by the seller. If the seller is found guilty of any deception or fraud in disclosing information, the buyer has every reason to terminate the contract and refuse the goods.

The initial price in Murabaha transactions must be interchangeable, measurable or approximately calculable. In other words, if the original price of the goods is not something that can be returned in kind, for example, by other property, this product cannot be sold in accordance with the conditions of Murabaha. If the original contract is not legal or invalid, such goods cannot be sold. Under the terms of Murabaha, the subject of sale must necessarily exist and be owned by the seller.


The ecosystems of Islamic finance allow the use of blockchain technologies for the organization and conduct of purchase and sale transactions that comply with the principles of Murabaha and Islamic law. Islamic financial institutions are not prohibited from using the advantages of blockchain and new technologies if they comply with fundamental moral principles. To conduct Murabaha transactions, one of the most reliable forms of concluding digital contracts can be used – smart contracts that ensure absolute transparency of transactions and allow avoiding any illegal practices that distort the morality of Islamic finance: maysir (gambling), dharar (harm), tadlis (fraud) and garar (uncertainty). Transactions made with the help of smart contracts are safe and do not carry risks that often interfere with Murabaha transactions.

How the smart contracts work

However, in order for the subject of the transaction to fully comply with Shariah law, it is necessary to solve some problems related to smart contracts. Among these problems are the inevitability of the offer and acceptance, which express the will of both parties, the provision of guarantees and liability of the parties for losses and defects.

To carry out Murabaha transactions, you can use cryptocurrencies and digital means of payment that comply with Sharia law. The digital currency of the Islamic Coin project can become such a means of calculation. It fully complies with the norms of Islamic finance: the project developers received a Fatwa from leading theorists of Islamic finance.

The technical basis of the project is a scalable, high-performance Proof-of-Stake blockchain, fully compatible and interoperable with Ethereum and built using the Cosmos SDK. Among the main features of the Haqq blockchain are compatibility with Web 3 and EM, high throughput and high transaction speed.

The goal of the Islamic Coin project is to provide the international Muslim community with a financial and technological tool that allows for independent financial interaction, while supporting technological evolution and charity. Smart contracts built on the Haqq blockchain and using the IslamicCoin currency guarantee compliance with Sharia law and can be used in Murabaha transactions, presenting an effective, secure and innovative platform to overcome the problems faced by traditional financial systems.

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