The speculative nature of cryptocurrencies had deemed it to be Haram (Sinful) by many Muslim scholars. Most crypto related activities were a hot topic between the Islamist leaders for the past couple of years. However, things seem to be changing for the better as several gold-backed cryptocurrencies that are compliant with Sharia law have been launched in recent months.
The Islamic faith believes that economic activities must not be based on hype and speculation rather it should be attributed to real and physical assets. Islamist governments have been issuing strong warnings on cryptocurrencies and their speculative aspect. Earlier two Imams were fired for their involvement in Crypto-trading.
Now, cryptocurrency companies are seeking to get the better of this religious hurdle by launching instruments based on physical assets and certified as valid by Islamic advisors.
OneGram is a UAE based startup that is issuing a gold backed cryptocurrency. Each of their tokens is backed by at least a gram of physical gold. OneGram obtained a ruling that its cryptocurrency confronts with Islamic principles from Dubai-based Al Maali Consulting.
HelloGold from Malaysia launched an ICO of its gold-backed cryptocurrency in October 2017 making a digital asset that is less volatile. Other Halal(lawful) crypto companies are UAE based logistic company called halal Chain which trades in Islamically permissible goods.
Whether or not these ventures are successful is yet to be seen. The important takeaway from these companies is that the underlying protocol of cryptocurrencies can be molded and changed to abide both religious and national laws.
The Islamic world is very cash rich and the crypto ecosystem requires their support to make a dent in the world financial markets. A major portion of the world are muslims, both geographically and demographically and launching a Sharia-compliant product is essential to them.