Technical Definition of money and Future of Crypto currency
Technical Definition of Money and Future of Cryptocurrency
What is money according to Sharia? The main features of money are that it is a strong value it is a unit of account a medium of exchange and a standard of deferred payment this is the main feature of money has acceptability meaning that it is accepted it is enforceable it is fungible it is divisible it is scarce it is portable and stable also so these are some of the fundamental elements of money in other words that there has to be a certain level of desirability of money itself if we have to call it money or a medium of Exchange.
According to Allama ibn abi jam and Allama ibn abidin shami they have mentioned that money should be desirable and storable also so, in other words, you should be able to desire it should be something that is desirable otherwise people want to have it and it should be storable. In other words, a person can store it now today we have different mechanisms of starting you know crypto assets so that is also permissible you can have an e-wallet you can have an e-exchange you can have a crypto exchange Etc so these are also different forms of stability of the crypto also and as I've mentioned before that the principle in Sharia is I'll ask to fill Ashia alibaha when it comes to matters then we'll say it's permitted unless you can prove that it is impossible.
So what is the future of crypto, you now have the Central Bank digital coins which is a form of e-money or E legal tender that has been pushed forward by different governments we know that we have the eu1 you have the E dollar that has been touted and different other currencies that are looking also at creating e-money and then there's also a good potential to create a gold back crypto so alhamdulillah we are looking at developing a number of you know cryptos that include a gold back crypto way you will be able to have a cold key and procure gold physical gold from a fault that backs up crypto.
There's also a very good opportunity in terms of D5 or decentralized Finance and also we need to ensure that you know the underlying fundamentals of D5 in terms of the white papers Etc is also surely a complaint smart contacts and blockchain has very good use in Islamic Finance especially when it comes to contracts such as the Murabaha ETC where you need to ensure that the different legs are separated and segmented and conducted in an appropriate manner so the issue of decentralized Finance in our view presents a massive opportunity for Islamic financial institutions going forward inshallah.
When it comes to staking staking is impermissible why because it is based on interest-based transactions it is based on a reward system that is backed by interest-based derivative transactions and swaps Etc so therefore speaking is impermissible there are other mechanisms of staking also that we need to look at more carefully.
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