Bitcoin is challenging conventional financial systems and offers Muslims an alternative to interest-based money that aligns with Islamic principles, experts have told the Bitcoin Mena conference held at Adnec in Abu Dhabi.
During a panel discussion on Monday, economist, best-selling author and Bitcoin expert Saifedean Ammous said: “If you care about your religion, you should consider moving away from dollars and government money, and getting into Bitcoin.”
The two experts agreed that cryptocurrency could be a revolutionary step forward for Islamic finance, moving away from traditional banking systems that rely on Riba.
Mr Ammous pointed out that Islamic finance has long forbidden Riba, the practice of earning money through interest and which is deeply embedded in modern financial systems. “Money is created through interest-based loans, which is prohibited in Islam," he said. “Even if you're not directly involved in lending, using government-issued money means participating in a system based on Riba."
However, Mr Ammous said Muslims now have a viable alternative to Bitcoin that does not rely on interest for its creation.
He added that Bitcoin does not need to be created through debt and said the cryptocurrency exists independently of Riba, unlike fiat currencies, such as gold and silver.
Harris Irfan, chief executive of Cordoba Capital Markets and adviser at Onramp Mena, agreed, acknowledging that many Islamic scholars have criticised Bitcoin for its volatility and lack of government backing.
“Many scholars claim Bitcoin is haram [forbidden] because it lacks intrinsic value and isn't supported by a government,” he said.
He noted that after 60 years of modern Islamic finance, the industry has yet to move beyond fiat financing. “All we're doing in this industry is reverse-engineering conventional debt based on fiat money and fractional reserve banking,” Mr Irfan said.
He added that every time an Islamic bank enters a financing contract with a customer, it creates new money, much as a conventional bank does.
Mr Irfan noted that people have yet to move beyond conventional wisdom. “We hand down from generation to generation that this is the way to do economics and banking,” he said.
Both experts addressed the hesitation among some religious authorities to accept new financial technology.
Mr Ammous criticised this cautious approach and said many scholars are quick to dismiss Bitcoin as forbidden without fully understanding its value. “Unfortunately, religious authorities have historically taken the easy way out by thinking: if it's new, then let's just say 'no' and label it as forbidden,” he said.
Mr Irfan said a new generation of younger scholars is recognising Bitcoin's value as a more Islamic form of money that could replace the gold dinar that once fuelled the golden age of Islamic civilisation.
For him, Bitcoin has already proven its worth in practical terms. He cites his experience using cryptocurrency to bypass obstacles in traditional banking systems. “Bitcoin is freedom money,” he said, which allows for smoother transactions in regions where conventional financial institutions impose restrictions.
In 2014, Bitcoin was trading at about $500 per coin. A decade later, its price had soared to more than $100,000, marking a significant milestone in its evolution. The rise highlights Bitcoin's growing acceptance and its potential to reshape global financial systems.
What began as a niche digital asset has now become a mainstream financial instrument with far-reaching implications.
Mr Ammous said some religious scholars are doing a disservice to Muslims by forbidding Bitcoin, noting many Muslims could have greatly benefited from it a decade ago.
Mr Ammous and Mr Irfan believe Bitcoin offers a promising future for Islamic finance – one that is decentralised, transparent and free from interest-based practices.
Januzaj's club record
Manchester United 50 appearances, 5 goals
Borussia Dortmund (loan) 6 appearances, 0 goals
Sunderland (loan) 25 appearances, 0 goals
The rules of the road keeping cyclists safe
Cyclists must wear a helmet, arm and knee pads
Have a white front-light and a back red-light on their bike
They must place a number plate with reflective light to the back of the bike to alert road-users
Avoid carrying weights that could cause the bike to lose balance
They must cycle on designated lanes and areas and ride safe on pavements to avoid bumping into pedestrians
if you go
The flights
Flydubai offers three daily direct flights to Sarajevo and, from June, a daily flight from Thessaloniki from Dubai. A return flight costs from Dhs1,905 including taxes.
The trip
The Travel Scientists are the organisers of the Balkan Ride and several other rallies around the world. The 2018 running of this particular adventure will take place from August 3-11, once again starting in Sarajevo and ending a week later in Thessaloniki. If you’re driving your own vehicle, then entry start from €880 (Dhs 3,900) per person including all accommodation along the route. Contact the Travel Scientists if you wish to hire one of their vehicles.
PROFILE OF CURE.FIT
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Based: Bangalore, India
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Investment: $250 million
Investors: Accel, Oaktree Capital (US); Chiratae Ventures, Epiq Capital, Innoven Capital, Kalaari Capital, Kotak Mahindra Bank, Piramal Group’s Anand Piramal, Pratithi Investment Trust, Ratan Tata (India); and Unilever Ventures (Unilever’s global venture capital arm)
Last 10 NBA champions
2017: Golden State bt Cleveland 4-1
2016: Cleveland bt Golden State 4-3
2015: Golden State bt Cleveland 4-2
2014: San Antonio bt Miami 4-1
2013: Miami bt San Antonio 4-3
2012: Miami bt Oklahoma City 4-1
2011: Dallas bt Miami 4-2
2010: Los Angeles Lakers bt Boston 4-3
2009: Los Angeles Lakers bt Orlando 4-1
2008: Boston bt Los Angeles Lakers 4-2
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
MATCH INFO
Sheffield United 3
Fleck 19, Mousset 52, McBurnie 90
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Williams 72, Greenwood 77, Rashford 79
