In the past couple of years we have seen a surge of cryptocurrencies, as more and more people, governments and countries wrap their heads around the potential future of the currency, the world slowly moves forward towards its acceptance. However it hasn’t earned the status of being recognized as a legit form of currency in a few parts of the world. Mostly Muslim majority countries around the globe have had a distant relation with cryptocurrencies.
And this distance hasn’t been due to the lack of interest of crypto companies in those regions. In fact the Muslim community is a rather profitable potential market, as they account for 23% of the world’s population, which means the Muslim population around the world is roughly 1.6 billion. Asia Pacific countries like India, Indonesia, and Malaysia, to name a few comprise of Muslims. Other than that the Middle East is pretty attractive market in itself. So clearly the business potential isn’t the issue here.
The reason lies in the teachings of the Muslim faith, i.e. Islam. According to the Islamic or Shariah Law, Muslims are prohibited by their religion from the act of lending for profit on interest, in short usury. Another stringent guideline regarding money, laid out in Islam is that commodities of intrinsic value or currency backed up by intrinsic value commodities such as gold or silver, is considered as legitimate currency. And Bitcoin and other cryptocurrencies are not backed by anything like that.
These religious constraints have become a central issue for financial authorities lately, with the International Monetary Fund (IMF) holding their first formal discussion about the needs of Islamic banking last year. However, practicing Muslims around the world, who have a keen interest in cryptos can rejoice as the crypto world is working towards becoming Shariah compliant.
X8 AG, which is a Swiss fintech firm, has been certified by Islamic scholars for its digital currency. The team behind X8 has dug deep to find the solution for the religious hesitation holding Muslims back and their solution hitting the right points. X8’s Ethereum-based cryptocurrency is backed by a basket of eight fiat currencies and gold. Which addresses to the issue of a currency being backed by commodities of inherent value.
Furthermore, X8’s cryptocurrency and related tokens have been certified by the Shariyah Review Bureau (SRB), Which is an Islamic advisory firm licensed by Bahrain’s central bank. This step of X8 will surely benefit the firm with its planned expansion in to the Middle East region.
The Gulf region is a really good place for financial technology companies, because they all want to become hubs for fintech
Said the X8 director and co-founder Francesca Greco.
This has opened the doors of the Muslim world for many other fintech firms. It is yet to be seen how the general Muslim population reacts to cryptos and whether they will be as accepting towards the digital currency instantly and with open arms or take their time in gauging it.
Stay tuned to BlockPublisher for more details.