UAE-based startup Adab Solutions has launched the world’s first cryptocurrency exchange that operates with full Sharia law compliance.
The exchange will be overseen by an in-house Sharia Advisory Board (SAB) comprised of independent experts that will ensure the operations unfailingly remain within the jurisdiction of Islamic law. The project cites its purpose as bringing a quality assets exchange to the Islamic community for the first time.
Adab Solutions plans to begin an initial coin offering (ICO) in September, with the tokens distributed functioning in the platform’s internal ecosystem as the tool for accessing services. All of the exchange’s commissions will also be issued using the tokens.
Crypto may be more compatible than fiat
Sharia law prohibits Muslims from lending money to anybody with the expectation of receiving interest on this amount, regarding fractional reserve lending that the majority of fiat currencies operate with as usury.
Cryptocurrencies differ in this respect as they are underpinned by logistics of scarcity, appreciated by those practicing Sharia as it acts similarly to commodity trading such as gold that they adhere to.
In April, Islamic scholar Mufti Muhammad Abu Bakar published a paper detailing how the majority of the time Bitcoin is Halal (permissible), with the caveat that illicit use of the cryptocurrency or use of it in countries where it is prohibited by local laws are not Sharia-compliant.
Several of the shared principles between Bitcoin, blockchain, and Sharia cited in the paper include a goal of reducing excessive uncertainty, as well as their primary application of payments and exchanges.
Speculation following the published report attributed a USD 1,000 price surge of Bitcoin to Bakar’s statement that Muslims can participate in Bitcoin trading.
Comprising around 23% of the world’s population, Muslims can indeed be a powerful market force as they choose to enter the community.
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