Japanese digital media giant OKWAVE Inc’s blockchain arm, OKBLO CKCHAIN CENTRE Sdn Bhd. (OBC), has concluded its collaborative research on shariah-compliant digital coins with Universiti Teknologi Malaysia (UTM). The study which began on 30th December 2018, investigated the viability, importance and requirements of shariah-compliant cryptocurrency.
Global cryptocurrency user base exceeds 30 million people and the adoption of cryptocurrencies in commerce is a growing trend among global markets. However, statistics show that cryptocurrency usage in Muslim countries is amongst the lowest worldwide, which is attributed to their reluctance in legitimising cryptocurrencies for fear that they are not compliant with Islamic law.
OBC-UTM’s paper proposes that the shariah-compliant blockchain ecosystem comprises of four shariah based features; permissioned ledger on public network for registered users, stable coin that is backed up by gold with window price mechanism, forensic transaction system, and KYC/AML compliant protocol. The features aim to tackle the issues of gharar (uncertainty), maisir (speculation), riba (usury) and zulm (injustice).
In addition, Lastroots, a subsidiary of OKWAVE Inc, successfully acquired a registered cryptocurrency exchanger license from the Kanto Finance Bureau (Virtual currency exchange registration: Kanto Local Finance Bureau No.00018). Following their first successful licensed coin, OKWAVE Inc Japan plans to create a digital coin to fulfill demands for shariah-compliant cryptocurrencies in the Muslim world, an idea welcomed by Malaysian Prime Minister, Tun Dr Mahathir Mohamad and Muslim leaders at the Kuala Lumpur Summit 2019.
“These shariah-compliant digital coins will have certain competitive advantages in saturated cryptocurrency pools of the future. The stability of the coins will make users feel more secure with ptocurrency investment, and governments will be more comfortable with the widespread use of the currency, thanks to the coin’s novel approach in supporting anti-money laundering and consumer laws,” added Matsuda Gen, the Chief Executive Officer of OBC and Board of Directors of OKWAVE Inc.