Sharia Bitcoin makes finance better
Sharia Bitcoin makes finance better – Islamic banking principals are significantly different than banking as we know it in the western world. Bitcoin and Sharia go hand in hand and together they can make the financial industry healthy again. In this world there are NO overpaid CEOs, corrupt banks or very complex stocks who nobody understands.
How is Islamic banking different
Sharia law prevents financial institutions from to receive and pay interest and having debts. It’s also forbidden to speculate and invest in for e.g. weapons, gambling, sex related businesses and alcohol. Especially the rule that you’re not allowed to speculate makes Islamic banking really stable. You see very rarely an Islamic bank in the headlines that’s in trouble. Even today as we still live in a global financial crisis. There is much to learn here for any western bank.
Is Bitcoin halal or not
We are all familiar with the benefits of the Bitcoin itself. It’s lightning fast, cheap and secure to use. But is it allowed to use in the Islamic world?
According the Sunnah money has six traits:
1. It’s a precious metal or food
2. Freely available and abundant
3. It does not spoil
4. It has value
5. It exists in nature and is made valuable by Mohammed
6. It is a medium of exchange
Paper is not a precious metal or food. Its value deflates due to inflation and is not intrinsic, but comes from legal tender laws. Its price is set by central planners and is not determined by supply and demand. This means that paper money only satisfies two of the six requirements. Bitcoin should therefore be acceptable in the Muslim world and is definitely an alternative for Muslims looking for alternative money.
Muslims underserved by banks
Not only in the west, but also in the Islamic regions Muslims are a true underserved group. Even in the largest Muslim country Indonesia about 8% of financial services are compliant with the sharia. Given that 20% of the total population are Muslim the financial industry is missing a huge opportunity here.