Are Sharia-Compliant Asset-Backed Tokens the Future of Cryptocurrency?
The addition of assets to digital currencies could provide an extra layer of protection to clients.

This guest article was written by Ibrahim Mohammed, founder of OneGram.
As Bitcoin speeds towards the 3,000 USD mark and new digital currencies emerge each day, questions around sustainability in the market beckon. What’s driving this phenomena? Some critics claim that this bubble won’t last, and will soon be replaced with more sustainable options.
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Yet, the cryptocurrency industry now has a market capitalization in excess of $100 billion, jumping threefold since 2016 with no signs of slowing. Conventional analysts believe that the drive is due to shortened supply from individuals holding Bitcoin and creating a false market need, combined with the fact that many digital currencies can only be purchased using Bitcoin. Could asset-backed digital tokens be the answer to creating a more sustainable, stable cryptocurrency market?

The Islamic principles of financial regulation require that there must be a physical attribute that is underlying on an equal basis to what’s being issued. The underlying asset cannot be leveraged, and needs to be issued on a one-to-one basis, ensuring that liquidity is real and not debt-driven. The governance surrounding Islamic products is extremely high, requiring Sharia advisory and audit boards to ensure products are traded ethically and within guidelines established for good business practices.
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These days, with the emergence of each new digital token, comes accusations of “fake!” and “scam!” from skeptics online. Investors have been burned before by shady projects and exits, and are demanding more transparency. With many new digital tokens, it remains to be seen whether they’ll follow through on plans to allocate funds and distribute tokens as promised.
That being said, asset-backed tokens that adhere to the Islamic financial sector’s high standards could eliminate these accusations and the volatility associated with them. Digital tokens backed by physical gold, for example, could lower risk and provide more compelling investment opportunities.
The addition of assets to digital currencies provides a layer of protection to investors, ensuring a minimum exit that can prevent a total wipeout of their funds. The concept provides much-needed clarity in the market, as physical assets can be tracked more visibly. This allows investors to evaluate the market value and asset base of a cryptocurrency, and deters the ‘get rich quick’ schemes as the token provider must fulfil baseline requirements to launch a product or cryptocurrency.
With the cryptocurrency industry and market cap evolving at a rapid pace, corrections are inevitable. One way we can ensure the longevity and success of digital currencies is by backing them with assets, thereby creating a more liquid, transparent, and sustainable future for the industry.
What a bullshit ! Pure marketing BS to target Muslim society and push this “yet another coin” to uneducated and less informed Muslims who think Shariaat is the answer to everything starting from camels and ending to mathematics of supernovas and Mars exploration!!!
Simple question: If “Shariaat banking” is the answer, then why all Muslim millionaires keep their money and assets in Western banks which don’t follow Shariaat rules?!?
Muslims account for ~25% of the world’s population at 1.8 billion as of 2016 (see http://www.pewresearch.org/fact-tank/2017/05/26/muslims-and-islam-key-findings-in-the-u-s-and-around-the-world/ as one source for this statistic). It is important to remember the actions of the few that are heard loudest do not dictate actions of the whole.
Absolutely!!, Evolution has its up and down.some times it’s reverse you see.. Aryabhatta to cow urine promotors if that is reverse osmosis of science so let it it be too !! you dont worry there are takers for every offering. be it sharia or Cow Urine.. its is Supply demand and Human Idiocity.. You see 🙂 🙂
It’s important to understand that the end result of a Shari’a-compliant cryptocurrency is a cryptocurrency is one that gets to reap the benefits of Blockchain technology, whilst still being a more stable investment than speculative alternatives.
Registered for OneGram as it’s an interesting model. Saw the spreads/commisions and changed my mind – seems more of a marketing tool for some retail gold shop.
I’d still buy it if the costs of it wouldnt be so big.
Hi Vali, Are you referring to the 10% premium that one has to pay with every purchase of OGC during the ICO? You may feel this is slightly steep, but it’s integral to the sustained growth OGC project over the duration of the ICO, and going forward. The 10% premium is re-invested into the project as follows: 5% for long-term business development, 1.5% marketing costs, 1.5% operational costs (such as storage fees and gold transport costs) and 2% salaries. The infographic displaying these figures within the Whitepaper can be seen in more detail here: https://onegram.org/whitepaper/. A small price to pay… Read more »
This was already tried with eGold. Because it was NOT decentralized, USA gov’t alphabet teams interfered and ultimately made it unfeasible to operate it. That was always the inherent weakness of any digital currency. BTW, traditional fiat [national] money in Muslim countries such as Saudi Arabia, UAE, Malaysia, et.al….are they all 100% asset backed? In other words, could the bearer walk into a local bank with the national currency and exchange it upon demand for gold or another asset? Didn’t think so. So it’s not so much a question of if the currency is backed by a real asset. It’s… Read more »