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Sharia Compliant #Cryptocurrency Exchange Sets its Sights on #Malta

Malta continues to take the lead in attracting blockchain and cryptocurrency ventures and now also in the upcoming Islamic finance scene. The new Sharia compliant cryptocurrency exchange Huulk has applied for a digital exchange license in Malta and hopes to partner with several European exchanges in the coming weeks. According to Huulk CEO Ibrahim Mohammed, Malta’s Bianchi Holdings would be an equity partner in the exchange. Bianchi Holdings Chairman Michael Bianchi is also involved in other blockchain and cryptocurrency ventures. The Huulk exchange is aiming to list around 20 Islamic fintech firms, some of which operate in Muslim-majority countries like Turkey and Malaysia. OneGram also plans to list its own sharia-compliant cryptocurrency on the exchange by mid-September. OneGram has sold around $400 million in gold-backed tokens over the past year.

#UAE Startup Launches First-Ever Sharia-Compliant Islamic #Crypto Exchange

UAE-based Adab Solutions has announced the launch of the First Islamic Crypto Exchange (FICE). An in-house Sharia Advisory Board (SAB) made up of independent international Sharia experts will be in place to ensure that the exchange is in compliance with Sharia law. In April 2018, Mufti Muhammad Abu Bakar declared that bitcoin is Sharia-compliant, and as such can be used by Muslims. The move potentially opens the cryptocurrency space to a global market of over 1.8 billion Muslims. Adab Solutions is preparing to launch the project ICO in September and tokens will be used as utility keys to access the exchange platform’s services. All commissions within the FICE will be paid exclusively in Adab tokens.

A second look at the performance of Shariah compliant share indices

The Shariah compliant index generally under-performs its conventional analogue before the global financial crisis years of 2007 and 2008, outperforms during the global financial crisis and then under-performs again afterwards. A conventional equity investor should perform better than a Shariah compliant investor, simply because the the conventional investor can pick from the entire universe of shares, while the Shariah compliant investor cannot.

#Fintech for Good – A feasible dream or just pretty posturing?

Many Fintech firms have sustainability and social impact at the heart of what they do. For example, Omisego has a Blockchain based use case, focused on Financial Inclusion in South East Asia. They offer users a mobile eWallet that runs on the OmiseGO decentralized exchange (DEX) to send, buy, sell, or trade fiat currencies, digital assets, and cryptocurrencies. Konfio focuses on unsecured SME lending delivered digitally in Mexico. Humaniq was originally based in Africa, and has most of its customers in the continent. The Bio-Id capability that Humaniq developed acts as the stepping stone for many in Sub-Saharan Africa to access financial services. The company has recently hit a key milestone of 400k customers across 16 African nations. BIMA is a Swedish-British startup, focused on providing affordable insurance to consumers in the developing world.

In memory of Kofi Annan: Father of the modern corporate sustainability movement

A great son of Africa and a true global leader has passed away. Kofi Annan, United Nations secretary general from 1997 to 2006 and co-recipient, with the UN, of the Nobel Peace Prize in 2001, is being mourned all over the world. As last great reformer of the United Nations, he managed to modernize its bureaucracy in critical areas such as women empowerment and global health. Kofi Annan not only had the courage to call on CEOs to embed universal values of humanity into corporate strategies and practices. He also played a critical role in the creation of the modern sustainable investing movement. Together with John Ruggie, Kofi Annan paved the way for the UN Guiding Principles on Human Rights, now the gold standard in this critical area.

Bitcoin Continues Making Inroads in Islamic Finance

On paper, it will be very difficult for Bitcoin and other cryptocurrencies to gain traction within the Islamic finance industry. Unlike what most people may assume, Bitcoin can still be Shariah-compliant. For example, Adab Solutions has launched the First Islamic Crypto Exchange (FICE), which is fully Shariah-compliant and will expose users to various cryptocurrencies. FICE has its in-house Shariah Advisory Board and will conduct an initial coin offering. Investors purchasing these tokens will be given access to all services provided by the exchange. Additionally, commissions paid to users of the FICE will come in the form of Adab tokens.

Gulf grapples with ‘silent’ economic crisis

After years of strong economic growth, most of the economies of the six-member Gulf Cooperation Council (GCC) began to slow back in 2014. Major layoffs started soon after 2015, with major and minor employers shedding jobs. The cuts continued in 2016 and 2017, too. Most of those made redundant were non-natives and this has had an impact on the real estate sector. Dubai’s DAMAC announced this month that its second-quarter 2018 profits were down 46% year-on-year, while fellow developer Nakheel saw its profits dip 3.8% in the first six months of this year. Retail and tourism also felt the pinch, as the number of shoppers has dropped off. In Dubai there is a general fear in the emirate on speaking out about the economy, leading many to dub this the "silent crisis".

RBI’s efforts to stabilise rupee hit country’s forex reserves, experts say

A strong US dollar and subsequent interventions by the country’s central bank to stabilise the rupee drained over $1.80 billion (Dh6.61 billion) from India’s foreign exchange reserves. Reserves plunged by $1.82 billion during the week ended August 10 to $400.88 billion from $402.70 billion reported one week earlier. According to Anindya Banerjee, deputy vice-president of Kotak Securities, the decline in Forex reserves can be attributed to the RBI’s intervention to stem the decline in rupee’s fall. Foreign currency assets fell sharply, but the value of the country’s gold reserves increased by $145.6 million to $20.69 billion.

Anticipating fraud in Islamic #fintech

The rapid development of information technology has a huge impact on the development of financial products and services. The advances in technology have forced banks to change and follow innovation in business strategies that use technology as an important component in their development.

Use of Ripple as a Cross-Border Solution Confirmed by #Kuwait Finance House (KFH)

Kuwait Finance House (KFH) is establishing the first blockchain-powered transaction system in the country. A series of questions arose when the formation of this system was announced. KFH has itself confirmed that they are using Ripple’s cross-border solutions to complete the blockchain-based transaction. KFH also conveyed that they would soon be joining RippleNet, which they initially announced back in May. This would enable them to become an active part of the ever-growing blockchain technology ecosystem. While neighboring Saudi Arabia may have banned cryptocurrency trading, it is obvious that Kuwait welcomes the underlying technology of virtual currencies.

Prominent Turkish bankers, businesspeople see no macroeconomic reason for currency volatility

For Turkey's bankers and businesspeople it has been impossible to explain the high volatility in the exchange rate over the past few weeks. The fundamentals of the Turkish economy are solid and macroeconomic indicators fail to account for the recent slide in the Turkish lira, which dropped by more than 40% since the beginning of this year. These fluctuations are seen as manipulations on the Turkish lira and economy, as part of an economic war waged against Turkey by U.S. President Donald Trump. The U.S. dollar tumbled nearly 5% against the Turkish lira on Tuesday. European shares rebounded Tuesday as the Turkish currency firmed. The Central Bank introduced measures on the Turkish lira and the foreign exchange market (FX) liquidity management. The bank said it would provide all the liquidity needed by banks and closely monitor markets and prices, while raising collateral FX deposit limits for lenders' lira transactions from 7.2 billion euros ($8.2 billion) to 20 billion euros.

Supporting Islamic #fintech’s growth

In this interview Ayman Sejiny, CEO of Ibdar Bank, talks about founding the Bahrain Fintech Bay. Bahrain Fintech Bay (BFB) is working to build a fintech ecosystem that will support industry growth and position Bahrain as a regional fintech hub. Sejiniy believes that the days of 'e-banking' are nearly over and the shift to mainstream digital finance is becoming a reality. Ibdar is an early adopter, transforming its organisation into a fully digitised Islamic Investment Firm for the Global Islamic Digital Economy (GIDE). Ibdar bank provides opportunities in aviation, real estate, Sukuk and investment funds. The bank is also expanding its services to include an array of Investment Advisory services.

Reconciling #cryptocurrency in Islamic finance

Over the last few years, the market capitalisation of cryptocurrencies has reached a near $400 billion with over 1500 currencies been created. Among them, bitcoin has been the most popular with a market capitalisation of over $150 billion. Currently, there are divergent opinions regarding the Islamic understanding of bitcoin among Shari’ah scholars. A section of Shari’ah scholars believe that bitcoin is purely speculative, while others believe that it is a digital asset and not money. There are also some who completely differ and opine that bitcoin is currency. According to Dr. Arindam Banerjee, Associate Professor at Amity University, at the current stage crypto is not suited as a means of exchange in Islamic banking and financial institutions.

#Pakistan likely to borrow $4bn loan from Islamic Development Bank: report

Pakistan plans to borrow over $4 billion from the Islamic Development Bank to bolster the country's low level of foreign currency reserves. A senior advisor in Islamabad said the paperwork is all in place. Finance minister-in-waiting Asad Umar has previously said that Pakistan must decide by the end of September if it would go to the International Monetary Fund (IMF) to bail out its economy. He reiterated his stance that Pakistan was examining other options as well as the IMF, including loans from friendly countries or remittances from overseas Pakistanis.

#Kazakhstan: Will Astana’s financial gamble pay off?

With the official opening of the Astana International Financial Center (AIFC), Kazakhstan aims to become the region’s main financial hub. The aspiration is for the center to draw $40 billion in finance by 2025 and in the process rebrand oil-rich Kazakhstan as a financial hotspot. However, at the moment it is very much a work in progress. The stock exchange is not yet trading. According to AIFC chief executive Kairat Kelimbetov, the center will operate according to English common law. A court staffed with English barristers and an arbitration center will be available for dispute resolution. But the sobering reality is that of the 49 companies registered at the AIFC, most are no-names. The mightiest player registered at the AIFC is the China Development Bank, a fact that signals a welcome vote of confidence from Beijing.

Shariah #Fintech – A Case Study of #Indonesia

Fintech has permeated the Islamic banking industry and this development is particularly evident in Indonesia. In July 2018, the country's deputy finance minister Mardiasmo plugged the term "Shariah fintech" in reference to financial technology that is compliant with Islamic laws and beliefs. The market share of Islamic finance remains at less than 5% of the total finance and banking market. There is tremendous potential, but there are some impediments blocking its growth. One is the presumption that certain fintech tools might not be compliant with Shariah law. Cryptocurrency was initially deemed as a violation of Shariah principles. However, in April 2018, Muslim scholar Muhammad Abu-Bakar, released a study exploring the functionalities of Bitcoin, concluding that it did indeed meet the requirements. Indonesia’s OJK (Financial Services Authority) is releasing a new set of regulations to govern the country’s fintech scene, set to come into effect in August 2018. These rules will extend to Shariah-compliant fintech tools as well.

BNM introduces Rahn policy document

Bank Negara Malaysia (BNM) has issued the Rahn policy document which is aimed at strengthening the practice among Islamic financial institutions to offer services that are end-to-end Shariah-compliant. BNM stated that the subject matter of the Rahn contract shall be collateral that is recognised by Shariah and Shariah-compliant liability or obligation owing to the pledgee. It added that the collateral must be owned either by the obligor, a third party, or the obligor and a third party. BNM said the collateral shall be immediately possessed by the pledgee upon entering into the Rahn contract unless a pledgee approves a delay in possession. A Rahn contract is applicable with contracts including qard, murabahah, tawarruq, baiinah, istisna, ijarah, kafalah, mudarabah, musyarakah, wakalah bi al-istithmar, and wad as well as takaful coverage.

Do Shariah compliant shares perform better?

During the global financial crisis many experts pointed out that Shariah compliant shares had performed much better than those which were not. However, once the world emerged from the crisis, the Shariah All-World index has consistently underperformed its conventional counterpart. A conventional investor who is selecting shares from the complete universe of shares will, on average, outperform a Shariah compliant investor who selects shares only from the Shariah compliant subset of the universe. The conventional investor is always free to buy high quality Shariah compliant shares, but the Shariah compliant investor can never buy high quality non-Shariah compliant shares. This is simply a fact of life to be accepted.

AAOIFI holds public event

The Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) held a public hearing of two of its standards hosted by Banque du Liban (BDL) (Central bank of Lebanon) in Beirut, Lebanon. AAOIFI also held its 10th meeting of the AAOIFI Accounting Board (AAB), where the Board deliberated on the Exposure Draft on Ijarah and Ijarah Muntahia Bittamleek, and the Standards Review and Revision Project. Several public hearings for AAOIFI standards have earlier taken place in Bahrain, Egypt, Pakistan, Turkey, United Arab Emirates (UAE) and future public hearings will be held during 2018 in different parts of the world to obtain industry feedback on other exposure drafts already issued by AAOIFI.

New Saudi bankruptcy law 'tries to find balance' between investor and creditor interest

Saudi Arabia’s new bankruptcy law will come into effect in late August and aims to attract foreign and domestic investment in private businesses. The new law is designed to outline bankruptcy proceedings and will offer protection to creditors and embattled companies seeking to conduct their affairs without fear of asset seizure. According to lawyer Dario Najm, an associate in Ahmad bin Hezeem & Associates, the new law allows indebted corporations to maintain their operations while gradually settling their debts. Creditors and debtors will enter into agreements on debt payment schedules. When implemented, the law will be the sole regulation covering bankruptcy, effectively replacing previous rules passed in 1996.

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