In a significant turn of events, Islamic Coin has reportedly inked a memorandum of understanding with CoinDesk Indices. The ambitious partnership aims to build Shariah-compliant crypto benchmarks, targeting the bustling Middle East and North Africa markets.
This cooperation seeks more than just market exploration; it also aims to license various benchmarks set by CoinDesk Indices for exchange-traded financial products. In this arrangement, HAQQ, a blockchain committed to formulating a Shariah-compliant financial ecosystem and the birthplace of Islamic Coin, benefits from exclusive access to CDI’s API for handpicked digital assets. This permission will be a boon for their digital asset exchange platform.
Notably, Mohammed AlKaff AlHashmi, founder of Islamic Coin, emphasizes the potential this collaboration holds. Given that the global Islamic finance market is projected to swell beyond a whopping $3.69 trillion by 2024, a partnership of this calibre could redefine the spectrum of Shariah-compliant digital financial services.
Without downplaying the promise this venture boasts, it’s important to scrutinize the underlying dynamics as well. While the integration of blockchain within the framework of Shariah-compliant finance does present a ripe platform for growing, the confluence of these two diverse systems poses potential challenges.
For starters, Islamic Finance is rooted in Shariah, a powerful collection of ethical codes and laws derived from the Quran. Since its inception, this system has prioritized transparency, risk-sharing, and the avoidance of ambiguity. Conversely, the world of crypto is still somewhat gray with regulatory challenges and isn’t ubiquitously perceived as transparent.
As such, reconciling the provisions of the Shariah with the inherent fluctuating nature of cryptocurrencies might be a potent concern. These are two realms with strikingly contrasting principles. With the digital currency world evolving at a breakneck speed, the task of ensuring that digital currencies align with Shariah laws might require nimble and proactive law-making.
On balance, this collaboration represents more than just the creation of digital currency benchmarks. It’s a platform where traditional ethics meet modern financial systems. Undeniably, the result of this amalgamation is tough to predict. However, as these forces unite, the evolving landscape of digital financial services will undoubtedly bear witness to this audacious experiment.
Source: Coindesk
