Islamic finance differs a whole lot from conventional finance. For its believers and followers, Islam lists a set of do’s and don’ts in the Quran, to guide them in living a life of sanctity. Cryptocurrency in Islam is a domain that is less understood and scarcely explored. But that will be a thing of the past soon as Beldex becomes the first Shariah-compliant crypto exchange.
Islam has a number of attributes that a currency must possess in order to be classified as an acceptable mode of payment. Beldex understands that there is still a lot of work to be done in this space. However, events like Islamic scholars of Masjid Ramadan in the UK allowing Muslims to pay Zakat in Bitcoin and Ethereum spills a ray of hope.
It is important to us that the usage of our services does not create a conflict of interest or hamper the moral, religious and legal principles of all individuals, since Beldex caters, equally and without bias, to a global audience.
Precisely, for this reason, Beldex is looking to get its hybrid cryptocurrency exchange compliant with the Shariah law. Moreover, in countries such as Indonesia, India, and Bangladesh that have huge Muslim populations, it becomes increasingly difficult to operate an exchange that the community considers “haraam”.
Beldex seeks to become an Islamic crypto exchange that abides by Islamic laws, conforming to the community’s beliefs and providing them with religious credibility in using the exchange. Beldex offers a ‘Halal Cryptocurrency Exchange’ that traders and investors of the Islamic community can benefit from.
Islamic Finance and Banking
What are the essential characteristics of an Islamic cryptocurrency exchange?
1. One practice that Islam strictly prohibits and advises its followers to refrain from is gambling (‘Maysir’). So, an Islamic cryptocurrency exchange does not allow gambling, nor does it list projects that support gambling. But what can be considered gambling in crypto? A look at how the prices of cryptocurrencies fluctuate and how one cannot be certain whether the price of their asset will yield a profit or loss is akin to gambling. Some people believe it introduces ‘Gharar’ or uncertainty into play.
Datuk Dr. Mohd Daud Bakar, Chairman of the Shariah Advisory Council at the Central Bank of Malaysia addresses this issue with more than pristine clarity. He states that cryptocurrencies do not necessarily introduce ‘Gharar’ or uncertainty. They merely introduce ‘Khatar’ or risk associated with any transaction. He further explains that this risk is innate to every other investment such as gold and land, so cryptocurrencies cannot be considered ‘haraam’.
2. Usury or the practice of lending money at unreasonably high interests (‘Riba’) is considered immoral and unacceptable in Islam. A halal crypto coin or a halal crypto exchange will not by itself, or permit its users to, levy unreasonably high payment of interests or the payment of any form of unearned income.
3. It does not aid, list, or associate with any business or financial institution that involves the production or consumption of alcohol, tobacco, pork, and other forbidden goods. Nor will it invest in these goods. No amount of revenue generated will be a result of handling forbidden goods. A complete and thorough analysis of a project will be made before venturing to list the project.
4. Pyramid schemes are a form of ‘Riba’. Financial pyramids that require investors to act as marketers of the product will not be allowed. All transactions are transparent and based on the intrinsic value of the Shariah coin. It also does not invest in or endorse the investment of funds in immoral activities such as funding of terrorism, pornography or laundering money.
Beldex is an exchange that has the qualities listed above.
Is Beldex Halal?
Beldex prohibits ‘Riba’. Beldex is in the process of consulting with learned scholars of Islamic law and has put plans in motion to find ways to implement the Shariah law to make crypto halal. Beldex aims to be an International exchange servicing a worldwide populace and an Islamic crypto exchange that adheres to the Shariah law. If implemented, Beldex will also be the first Islamic crypto exchange that is functional.
Beldex has a policy of strictly advocating and implementing Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) schemes into its exchange.