Islamic Coin (ISLM) is an emerging cryptocurrency that complies with Sharia rules. The mint’s founders have made a wild claim. Their Muslim-facing fortune could scale like Bitcoin (BTC) and reach the equivalent of more than $1 trillion.
“We know that the adoption will be gradual,” Mohammed Alkaff Alhashmi, co-founder of Islamic Coin, told BeInCrypto. “However, if only 3-4% of the online Muslim community owns Islamic coin, it will become a bitcoin-scale crypto asset. It will generate $1 trillion for its holders and $100 billion for the Evergreen DAO,” he added.
The language sounds incredibly bombastic, if not unbelievable. Considering that ISLM has not yet penetrated the market to the levels of, say, Ethereum. ETH is the second largest crypto asset with a market value of $157 billion capitalization. And that’s not even mentioning bitcoin.
It’s not even listed on the major stock exchanges. But Alhashmi is confident in the product his company is building. He says they are playing the long game in trying to tap into the $2.88 trillion Islamic finance sector.
Islamic coin: what is it?
According to Alhashmi, Islamic Coin is the native token of Haqq, the Proof-of-Stake (PoS) blockchain running on Cosmos via the EVMOS protocol. Translated as “Truth” in Arabic, Haqq “adheres strictly to Islamic views and traditions regarding finance”.
The idea behind the ISLM coin was to provide global Muslim believers with a tool through which to participate in the digital economy. Described as a Halal asset, Islamic Coin is said to comply with Sharia law.
This means that it is consistent with the basic principles that guide Islamic life and hence the law in matters of morality and decency. Alhashmi said the Islamic coin was specifically designed to facilitate philanthropic acts.
“Islam is the second largest religion in the world with nearly 2 billion followers: that’s about a quarter of the world’s population,” Alhashmi, a computer engineer, told BeInCrypto.
“Muslims make up the majority of the population in 47 countries. We built Islamic Coin to create a lasting, powerful impact for one of the largest communities in the world.”
Islamic Coin launched on the Haqq blockchain in May. In June, the token received a religious declaration, or “fatwa,” from Muslim leaders. This confirmed that it conformed to the religious standard, which frowns on issues such as gambling. Thus, Muslims could freely interact with the coin.
A month later, Islamic Coin raised $200 million in a private sale. This is an achievement considered remarkable in a bear market. The token will be overseen by a board of prominent Islamic bankers, software engineers and academics from the Swiss-based non-profit Haqq Association.
And yet. One thing to keep in mind is that people in the Middle East are loosening their ties to Islam, especially in countries like Iran. Young people in particular no longer identify with the strict orthodoxies as they used to.
Islamic coin tokenomics
Source: Islamic Coin Workflow
According to the white paper, Islamic Coin supply is capped at 100 billion tokens. Every two years (referred to as the Era), the coin’s issuance rate is reduced by 5%. The emission will stop in 100 years after the first block of the first era, it is said. 20 billion tokens were minted in the Genesis block.
Mohammed Alkaff Alhashmi said ISLM will be used for payments, network governance, staking and to pay transaction costs over the network. “One of ISLM’s most important goals is to drive progress and charity work,” he explained.
Every time new coins are minted, 10% of the amount issued goes to Evergreen DAO, a non-profit organization “focused on long-term sustainability and community impact.” The coins are deposited with the DAO “to be invested in Islamic internet projects or given to Islamic charities.”
Between 1% and 5% goes to a block proposer and their delegators. The remainder is shared among all bound validators and their delegators. As a proof-of-stake asset, Islamic Coin uses a system of delegators of bound validators.
These will be rewarded in proportion to the amount of ISLM tokens they have used to secure the network and process transactions. Rewards are distributed to the delegators minus the validator’s own commission.
ISLM holders can lock their tokens by binding them to validators in a process called staking. By binding coins, ISLM holders delegate voting rights to validators, becoming delegators. This gives them the right to earn rewards and participate in governance.
ISLM founders say the coin will compete with BTC
Bitcoin-style scaling
Alhashmi, the co-founder of Islamic Coin, claimed that the crypto asset is “the first digital money that is Sharia compliant and can be used by Islam followers without restrictions.”
He sees a future where 3% to 4% of the existing 1 billion Muslim internet users adopt the Islamic coin. The token would be able to scale similarly to Bitcoin (BTC), the first and largest cryptocurrency.
At 3% acceptance, Islamic Coin would have a cap value of $720 billion. The value would rise to $4.2 trillion at a 20% adoption rate, four times the existing global crypto market cap.
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The token’s “immense potential is supported by the global influence of the Muslim world,” according to Islamic Coin’s website.
According to the Global Islamic Economy Report, the volume of the Islamic financial sector was US$2.88 trillion in 2020 and is expected to grow to US$3.69 trillion by 2024. This is led by the growth of digital technologies and mobile communications.
Alhashmi’s predictions could be comparable to Willy Woo’s estimates that Bitcoin will reach 1 billion active users in three years. But let’s put Islamic Coin’s market cap prospects into perspective with the current metrics.
With a market cap of $1 trillion, Islamic Coin will be worth more than all of the existing 19,000+ cryptocurrencies combined. According to Coinmarketcap, the global crypto market cap is $916 billion. This is down from a peak of over $3 trillion last November.
Bitcoin accounts for 40%, or $366 billion, of that total. BTC is followed by Ethereum, Tether (USDT) at $68 billion, USD Coin (USDC) at $45 billion, and Binance Coin (BNB) at $44 billion.
Compliance with Sharia
Sharia compliance is a key customer need and regulatory requirement in several Muslim markets. However, the legitimacy of crypto assets like Bitcoin remains a subject of great controversy.
Prominent Islamic leaders have labeled Bitcoin “haram.” This means it is prohibited under Sharia law as the asset can be used for illegal activities such as money laundering, gambling and fraud which are prohibited by the Quran.
There are also some concerns about a lack of central authority and how digital currencies are stripping governments and central banks of their power over national monetary systems.
In November 2021, a leading Islamic scholar from Indonesia, Asrorun Niam Sholeh, issued a religious statement or fatwa. It warned supporters against crypto investing, saying, “It’s like a gamble bet.”
ethics
Alhashmi and his co-founders believe their project can help blockchain technology adopt a strong value system. “I believe DeFi will benefit from adopting a value system and some of those ethics,” he said.
“Sharia finance is based on ethics and values. His financial school does not support interests, gambling and so on. To ensure compliance, every project goes through our Sharia panel, which has over 45 years of experience in Islamic finance.”
ISLM receives support from powerful members of the Islamic community. Emirati Supreme Sheikh Khalifa Bin Mohammed Bin Khalid Al Nahyan was recently appointed to Islamic Coin’s Advisory Board.
Co-founders include Hussein Mohammed Al Meeza, Mohammed Alkaff Alhashmi, Andrey Kuznetsov and Alex Malkov.
Will Islamic Coin be the next Bitcoin? Or will it slip into anonymity like thousands of other crypto hopefuls? Let’s observe this room.
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