Dr. Samir Alamad, Associate Director International Finance and Banking at Coventry University and Chief Adviser Islamic Banking and Finance at IIFS LTD, spoke at the 5th International Conference on Islamic Finance (ICIF) in Doha, Qatar 9-10 October 2022.
Speaking at this global conference dedicated to addressing fintech and crypto in the context of the future of Islamic finance, Dr Samir provided a practical framework for assessing what would be acceptable from an Islamic finance and Sharia perspective as fintech- and crypto-assets which include cryptocurrencies.
Using religious rules as a directive, he examines the concept of money and cryptocurrency within the theory of money and how it is adopted in the context of Islamic finance, amid differences of opinion among the actors.
Dr. Samir commented on fatwas issued by national fatwa authorities in few countries that lack appropriate Sharia and academic analysis. He adds, while his position on this issue is neutral, the rationale for these fatwas was attributed to issues such as fraud, tax evasion, money laundering, gharar (uncertainty), but not to the core of the Sharia ruling. He explained that this is something we expect to be the basis for a ban from a central bank or a financial supervisory authority, rather than a fatwa authority. Dr Samir distinguishes between assessing the permissibility or impermissibility of fintech and crypto assets on the basis of Sharia rulings in Islamic jurisprudence and Maslaha (Sharia public good). He criticizes basing the ban on Maslaha first before we consider the Sharia ruling and the analysis of what is being considered Goal (money) and then what might be acceptable as a currency drawing a clear distinction between the two.
Dr. Samir concludes that there are different types of cryptoassets and cryptocurrencies that we should consider according to the criteria he has set up from an Islamic finance perspective. While some cryptocurrencies can be argued to meet the criteria to be considered money and used as a currency in society as permitted under Sharia, this cannot be argued for all of them. The maslaha al Shar’yyah and Shariah objectives are important evaluation criteria when evaluating fintech, cryptocurrencies or cryptoassets after evaluating it on the basis of Islamic jurisprudence with a clear rationale. Something may be ruled permissible according to Islamic jurisprudence, but its permissibility may be suspended under Maslaha (Sharia public good) because of the potential damage it could cause to destabilize a national currency or monetary policy in one or more specific countries that are not prepared to deal with this new phenomenon. Therefore, Islamic legal opinions should not be influenced by politics or politicized to serve a purpose outside its purview.
For inquiries please contact Ihsan Islamic Finance Solutions LTD (IIFS) and Islamic finance and banking advisory company based in UK.
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