Ethereum Foundation Seeks ‘Moonshot’ Partnership with Gulf Coast Finance Experts
- The Ethereum Foundation is working with financial experts to set up Sharia-compliant products in the crypto community.
- Presently, cryptocurrency trading is banned in Saudi Arabia.
The key to keeping the cryptocurrency industry alive over time is to ultimately have support from regions around the world in some way. The Ethereum Foundation is not taking this responsibility lightly, leading head of special projects Virgil Griffith to work to partner with financial experts in the Gulf Coast. In pursuing this “moonshot,” the nonprofit organization is working to show the authorities that they fall in link with the Islamic finance customs, including a prohibition for participants to earn interest on loaned funds.
This decision to pursue the Middle Eastern experts is part of their hope is to secure investments to the local plutocrats. Speaking with CoinDesk about the efforts to show Ethereum’s compliance with Sharia law, Griffith said,
“My job is to keep rolling dice.” He added, “Probably nothing will happen. But there is a hypothetical case where say, the Saudi sovereign wealth fund invests, like, a trillion dollars [in Ethereum projects], which would be a real boon. That would be really great.”
One of the experts at Amanie Advisors, Wan Hafizi Halim, spoke with CoinDesk about the matter as well, saying that his firm has already issued a statement that says that Ethereum smart contracts could be halal. He noted that they could be compliant with the Islamic banking rules, based on research conducted on the Ethereum Foundation.
Continuing, the expert said,
“What we did with Ethereum was just to provide the guidelines. Any companies that wish to fundraise in Muslim countries, they can also approach Sharia scholars to assess their projects to see if they are compliant from end-to-end. … With the Sharia certification they obtain, that could provide some clarity and convince Muslim investors to participate and invest.”
Presently, approximately $300 billion in investments are managed by Saudi Arabia’s Public Investment Fund (PBF), which is led by Crown Prince Mohammed bin Salman. In working on this certification, Griffith calls the effort a “moonshot,” standing to give them many benefits or major disadvantages. Still, investing in Ethereum-based projects is not a crazy idea.
An anonymous trader in Saudi Arabia, choosing to keep his identity secret as a result of trading being banned, said that the leaders are interested since these types of projects could help the economy. He added,
“Most blockchain development here happens on Ethereum. People are still pretty cautious and only testing things out.”
For now, Ethereum’s ConsenSys for-profit platform has already been working to establish connection with the government in the Gulf Coast. The Saudi sovereign wealth fund – PIF – has been speaking with ConsenSys, according to sources, but it is not clear if royals will be actually investing in an Ethereum project.
ConsenSys already has some projects within the area outside of Saudi Arabia. For instance, ConsenSys partnered with authorities in Dubai to work on making it into “the first city fully powered by blockchain in 2021.” In collaboration with Emirates Integrated Telecommunications Company, the investment platform has worked to establish digital permits and explore the idea of an automated “process of attesting any document by governmental entities.” At this point, there has yet to be a response to CoinDesk’s requests for comment.
Atif Yaqub, the liaison for the Ethereum Foundation, commented that ConsenSys is not presently involved in his own partnership with Amanie Advisors, which is meant to help the Ethereum platform to create financial products and services that are compliant with Sharia law. His project is working to cooperate with the foundation and the contacts of Griffith in the blockchain industry. However, it does not have funding with the Ethereum Foundation.
“An Islamic institute or a government, if they were to engage and create a product, first they would look to see about this Ethereum thing, what is it? Is it permissible for us to use within our structure? That part is already there.”
He added that if the Muslim leaders were ever to engage with anyone in this sector, participation is more likely if there is already an ecosystem in the works that is compliant.