In the Islamic faith, it’s believed that economic activity should be based on real, physical assets. Earning money through speculations or gambling, through banking products that offer returns via interest, aren't compliant with the sharia law.
The crytocurrency market is very volatile. There are big money to be made, and tons to lose from the rest.
People in the Middle East, or muslims in particular, don't consider cryptocurrencies to be compliant with the sharia law. But with the growing global interest in the digital coin, it has entered to affect the muslim populations. The Gulf and Southeast Asia which are the main centers of Islamic finance, are also affected. So there was something that needed to be done to how it works in order to comply with their faith.
So here, OneGram cryptocurrency has been launched.
The cryptocurrency startup is backed by physical assets, by at least one gram of physical gold stored in the vault, thereby certified valid by Islamic advisors.
The company obtained a ruling that its cryptocurrency conforms with Islamic principles from Dubai-based Al Maali Consulting, which is one of dozens of advisory firms around the world that offer opinions on whether financial instruments meet sharia standards.
"Gold was among the first forms of money in Islamic societies so this is appropriate," said Ibrahim Mohammed, who founded the company in 2017. "We are trying to prove rules and regulations from sharia are fully compatible with digital blockchain technology."
Initially, tens of millions of dollars worth of OneGram have been issued. This is about 60 percent of the total planned amount.
Before OneGram, a startup in Malaysia has also taken this approach. Called HelloGold, it's GOLDX has also received approval from Islamic scholars at Kuala Lumpur-based Amanie Advisors, and considered as the world's first cryptocurrency that complies with the sharia law.
