Blockchain and Sharia: Technology Serving Islam

Blockchain is becoming a key tool for complying with Sharia laws in the financial sector due to its transparency and transaction tracking capabilities, claims Mohamed AlKaff AlHashmi, co-founder of Haqq Network (an EVM-compatible layer-1 blockchain platform developed with Islamic law requirements in mind).

Blockchain technology most effectively ensures adherence to Sharia norms — the Islamic legal code with strict financial constraints. Transparency, transaction traceability, and public governance mechanisms make it the ideal tool for meeting religious requirements.

In Islam, there is a clear division of financial operations into "halal" (permissible) and "haram" (prohibited). The latter include guaranteed-interest lending, usury, and gambling. According to AlHashmi, blockchain allows effective checks on income sources and compliance of transactions with Islamic norms.

"If you look at blockchain, it is the technology most compatible with the ethics and values of Sharia. When it comes to transparency, public governance, and traceability, there's simply no better tool," the expert emphasizes.

There are about 2 billion Muslims worldwide, many of whom lack financial solutions that adhere to Sharia norms. This includes donations (zakat), equity-based mortgage lending, and investment strategies.

The Islamic finance industry is estimated to be worth about $4 trillion, and this figure could double in the next 5 years. According to Chainalysis, the Middle East and North Africa regions, where the Muslim population predominates, account for 7.5% of the global cryptocurrency transaction volume.

New Solutions

Major players in the crypto industry are actively developing products for the Islamic market. For example, the crypto exchange Bybit launched an Islamic account providing access to tokens, trading pairs, and trading bots that comply with Sharia norms. The project was developed with the participation of the Malaysian company Zico Shariah, specializing in Islamic law.

The Australian decentralized finance platform Marhaba Network, created in 2020, focused on providing financial services that comply with Sharia norms. By 2022, the non-custodial Sahal Wallet attracted more than 40,000 users.