Sharia-Certified Halal Cryptocurrencies
As part of our work on halal investment at IFG we are covering cryptocurrency and blockchain technology in a lot of detail. You can read the full series on this topic here.
In this article, we introduce some of the shariah certified cryptocurrencies. That is not to say other cryptocurrencies are haram. Just these cryptocurrencies have gone out of their way to be sharia-certified and target Muslim investors.
If you are ever stuck on whether a new cryptocurrency is halal or haram – just ask on our Fatwa forum.
Lumen works on the stellar network. Stellar is a decentralised mechanism that allows for digital money to be transferred to fiat money. It aims to make borderless transactions possible regardless of a particular currency.
Lumens are only needed in small amounts to initialise accounts and make transactions. Through Stellar, you create a digital token that has a 1:1 relationship with a traditional currency, be it USD or Peso. As tokens are backed by an equivalent deposit, exchanging tokens with someone allows them access to that traditional form of currency.
Like Bitcoin, the software is decentralised and runs on a blockchain network. It is faster, cheaper and more energy-efficient than most of its competitors.
Stellar was one of the first blockchain networks to receive a shariah-compliant certification. The Shariya Review Bureau issues the certification.
They have multiple sharia scholars working in 15 different countries. Notable names include Mufti Faraz Adam and Mufti Ismail Ebrahim Desai in the UK and South Africa respectively.
OGC is a digital asset backed by gold. Each OGC coin is backed by at least one gram of physical gold which also allows the coin some price stability.
OGC utilises a Proof of Stake protocol which is significantly more energy-friendly than BTC.
Furthermore, OGC donate 2.5% of the 1% transaction fee received to the OneGram foundation. OGC has won awards such as Best Islamic Cryptocurrency (2017) and Best Islamic Fintech Product (2018). It is regulated and certified by Al Maali Consulting Group.
Like Lumen, the Shariyah Review Bureau certifies X8. Using a basket of fiat currencies and gold, X8 ensures a strong a stable digital currency.
X8 uses automatic reserve management (ARM) artificial intelligence to trades the currencies and gold in its basket as a shield against inflation.
Cryptocurrencies can be halal however not all are – even the ones that seemingly seem acceptable.
It is also important to understand your investment priorities more holistically first before you dive into making a big investment into any one asset. Check out our free halal investment checklist that takes you through the basics. Also check out our halal investment comparison to see all the halal investments available to you in one place.