Gold Backed, Sharia-Compliant Crypto
A while back an investment firm – Amana Mutual Funds Trust – grabbed headlines by marketing themselves as a halal investment fund. The idea behind Amana is that it invests only in those companies that meet religious requirements. Specifically, it requires “that investors share in profit and loss, that they receive no interest (riba), and that they do not invest in a business that is prohibited by Islamic law, or sharia. Before investing in a company, it is necessary to evaluate its business activities and financial records to determine where its primary revenue comes from and how its income and expenditures are managed.”
An interesting concept that helps resolve any issues for members of the world’s largest faith.
A Malaysian firm is doing something similar, but in the area of cryptocurrencies.
The firm, HelloGold, is a gold-backed cryptocurrency with a sharia-compliant certification. The product of the company called, GOLDX, is designed to be an online gold platform with an expected launch in Thailand later this year with possibility of adding another country by the end of 2018. The sharia-compliant certification comes from Amanie advisors also from Malaysia.
The gold backing GOLDX is stored in Singapore. Currently, the blockchain system runs on the company’s mobile app.
Apparently, the design of the product meets requirements of Islamic financial contracts, such as transparency, certainty and immediacy.
The obvious advantage of this product is that it targets and meets a need for Islamic finance markets across the Middle East and Southeast Asia. However, it also illustrates a more general trend of consumers around the world demanding products and services that align with their social and political perspectives. We see this in everything from where products are sourced to how leaders of brands associate themselves with certain groups or movements. In 2017, the CEO of Papa John’s lost his role after blaming political protests in the NFL for lower sales.
With such a large potential market in Muslim investors, does this crypto with the backing on a commodity usually considered to have an intrinsic value have a future?
Amanda Mutual Funds Trust
https://www.saturna.com/amana/halal-investing
Reuters