Cryptocurrencies set to give Islamic finance major boost: Bahrain Webinar

“Cryptocurrencies – A Double-edged Sword: Challenges and Opportunities for Islamic Finance”, gathered industry experts

  
FILE PHOTO: Representations of cryptocurrencies Bitcoin, Ethereum, DogeCoin, Ripple, Litecoin are placed on PC motherboard in this illustration taken, June 29, 2021.

FILE PHOTO: Representations of cryptocurrencies Bitcoin, Ethereum, DogeCoin, Ripple, Litecoin are placed on PC motherboard in this illustration taken, June 29, 2021.

REUTERS/Dado Ruvic

MANAMA: As new digital payment means facilitating efficient, convenient, and secure transactions, cryptocurrencies can help develop Islamic finance, experts told a webinar.

Resulting from a collaboration between Bahrain-based General Council for Islamic Banks and Financial Institutions (Cibafi) and the Islamic Corporation for the Development of the Private Sector (ICD), the discussion titled “Cryptocurrencies – A Double-edged Sword: Challenges and Opportunities for Islamic Finance”, gathered industry experts to discuss the different views on cryptocurrencies.

It highlighted how as one of the most innovative and disruptive applications of fintech, cryptocurrencies are generating a series of debates amidst a lack of regulatory clarity in the Islamic financial services industry.

Ayman Sejiny, chief executive of ICD cited the opportunities that blockchain driven applications can bring to the development agenda, including the promotion of financial inclusion and the growth of the Islamic finance industry in particular.

Mr Sejiny said Sharia-compliant adaptation of cryptocurrencies will be, remarkably, a major milestone in the industry.

And the recent adaption of various blockchain applications show how the acceptance level for cryptocurrencies and other applications are increasing amongst Islamic banks, he added.

“From the development perspective and with an aim to contribute to the promotion of financial inclusion, ICD has built a fintech platform to offer blockchain driven financial services for usually unbanked and underserved individuals and small and medium size enterprises. ICD will continue exploring practical Sharia compliance opportunities to further enhance its fintech platform with smart sukuks issuance, asset tokenisation, zakat and sadaqah collection for development purposes,” he added.

Dr Abdelilah Belatik, secretary general of Cibafi, said: “Today’s global finance industry is confronted with a wave of disruptive trends and important new developments in digital technologies. Cryptocurrencies are an example of these transformative trends for the future of digital and Islamic finance. We are pleased to collaborate for the second time with ICD to highlight how they can be embraced and supported for the growth of Islamic finance.”

“In the same context, Cibafi in support of these advancements have recently established an Innovation and Technology Working Group (ITWG). This group will conduct various initiatives with the aim of strengthening the adoption of financial technologies within the Islamic financial services industry. These initiatives include encouraging innovation and product development activities that are in line with the industry developments and Sharia objective, among many others,” he added.

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