Islamic Coin (ISLM) is an emerging Sharia-compliant cryptocurrency. The founders of the coin have made a far-fetched claim. His Muslim-focused asset could scale like Bitcoin (BTC) and reach the equivalent of over a trillion dollars in value.
“We know that adoption will happen gradually,” Mohammed Alkaff Alhashmi, co-founder of Islamic Coin, told BeInCrypto. “However, if only 3-4% of the online Muslim community owns an Islamic currency, 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 incredible. That is considering that ISLM has not yet penetrated the market to the level of, say, Ethereum. ETH is the second largest crypto asset with a market value of $157 billion in capitalization. And that’s not mentioning Bitcoin.
It’s not even listed on the major exchanges yet. But Alhashmi is confident in the product his company is building. He says they are playing the long game as they try to tap into the $2.88 trillion Islamic financial sector.
Islamic Currency: What is it?
According to Alhashmi, Islamic Coin is the native token of Haqq, the Proof-of-Stake (PoS) blockchain that operates on Cosmos via the EVMOS protocol. Translated as “truth” in Arabic, Haqq “strictly adheres to Islamic views and traditions on finances.”
The idea behind the ISLM currency was to give the Muslim faithful around the world an instrument through which they could participate in the digital economy. Described as a Halal asset, Islamic Coin is said to be Shariah compliant.
This means that it conforms to the basic principles that guide Islamic life, and by extension the law, around issues of morality and modesty. Alhashmi said that the Islamic Currency was specially designed to facilitate philanthropic acts.
“Islam is the second largest religion in the world with almost 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 designed Islamic Coin to make a powerful and lasting impact for one of the largest communities in the world.”
Islamic Coin was launched on the Haqq blockchain in May. In June, the token received a religious declaration, or a “Fatwa,” from Muslim leaders. This confirmed that he met the religious standard that frowns on issues like gaming. Therefore, the Muslims were free to interact with the currency.
A month later, Islamic Coin raised $200 million in a private sale. This is a feat seen as remarkable in a bear market. The token is overseen by an executive board of leading Islamic bankers, software engineers, and academics from the Haqq Association, a Swiss-based non-profit organization.
And yet. Something to consider is that people in the Middle East are loosening their ties with Islam, especially in countries like Iran. Young people in particular do not identify with strict orthodoxies as they used to.
Islamic coin tokenomics
According to the white paper, the Islamic Coin supply is limited to 100 billion tokens. Every two years (called an Era), the coin’s issuance rate is reduced by 5%. The emission will stop in 100 years from the first block of the first Era, he says. 20 billion tokens were minted in the genesis block.
Mohammed Alkaff Alhashmi said that ISLM is used for payments, network governance, staking, and to pay transaction costs over the network. “One of the most important purposes of ISLM is to further progress and charity work,” he stated.
Every time new coins are minted, 10% of the amount issued goes to the Evergreen DAO, a non-profit organization “focused on long-term sustainability and community impact.” The coins are deposited in the DAO “to be invested in Islamic Internet projects or for Islamic charities.”
Between 1% and 5% goes to a block proponent and their delegators. The remainder is distributed proportionately to all linked validators and their delegators. As a proof-of-stake asset, Islamic Coin uses a system of linked validator delegators.
These are rewarded in proportion to the number of ISLM tokens they have staked to help protect the network and process transactions. Rewards are distributed to delegators minus the validator’s own commission.
ISLM holders can lock their tokens by binding them to validators in a process known as “staking”. By pooling coins, ISLM holders delegate voting power to validators and become delegators. This entitles them to earn rewards and participate in the government.
Alhashmi, the co-founder of Islamic Coin, claimed that the crypto asset “is the first Shariah-compliant digital money, which can be used by followers of Islam without any limitations.”
He sees a future in which 3% to 4% of the existing billion Muslim internet users adopt Islamic currency. The token would be in a position to scale like Bitcoin (BTC), the first and largest cryptocurrency.
At 3% adoption, Islamic Coin would be worth $720 billion in capitalization. The value would skyrocket to $4.2 trillion at a 20% adoption rate, four times more than the total capitalization of the existing global crypto market.
The token’s “immense potential is backed by the global influence of the Muslim world,” says Islamic Coin. website.
According to the Global Islamic Economy Report, the volume of the Islamic financial sector was $2.88 trillion in 2020 and is expected to grow to $3.69 trillion by 2024. This is led by the growth of digital technologies and mobile communications.
Alhashmi’s projections could be comparable to Willy Woo’s estimates that Bitcoin will hit 1 billion active users within three years. But let’s put Islamic Coin’s market cap outlook into perspective with current metrics.
With a market capitalization of $1 trillion, Islamic Coin will be worth more than all of the 19,000+ cryptocurrencies in existence combined. According to Coinmarketcap, the global crypto market capitalization 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 $68B, USD Coin (USDC) ~$45B, and Binance Coin (BNB) at $44B.
Sharia compliance is an important customer need and regulatory requirement in many Muslim markets. But the legitimacy of crypto assets like Bitcoin remains a subject of great controversy.
Prominent Islamic leaders have labeled bitcoin “haram.” This means that it is prohibited by Sharia law on the basis that the asset can be used for illegal activities such as money laundering, gambling, and fraud, which are prohibited by the Quran.
There is also some concern about the lack of central authority and how digital currencies strip governments and central banks of their power over national monetary systems.
In November 2021, a prominent Indonesian Islamic scholar, Asrorun Niam Sholeh, issued a religious statement or fatwa. He warned supporters against crypto investing, saying, “it’s like gambling.”
Alhashmi and his co-founders believe that their project can help ensure that blockchain technology embraces a strong value system. “I think DeFi will benefit from embracing a value system and some of these ethics,” she said.
“Sharia finance is based on ethics and values. Your financial school does not allow interest, games of chance, etc. To ensure compliance, every project goes through our Shariah board, which has over 45 years of Islamic finance experience.”
ISLM has begun to receive support from powerful members of the Islamic community. Emirati High Sheikh Khalifa Bin Mohammed Bin Khalid Al Nahyan was recently added to the advisory board of Islamic Coin.
Co-founders include Hussein Mohammed Al Meeza, Mohammed Alkaff Alhashmi, Andrey Kuznetsov, and Alex Malkov.
Will the Islamic currency be the next Bitcoin? Or will he slide into anonymity like thousands of other crypto hopefuls? Let’s take a look at this space.
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