In an academic meetings Dr. Mohd Ma’Sum Billah said: The most important jurisprudential problem of Bitcoin is lacking of law. Therefore a reform is essential.
AhlulBayt News Agency (ABNA): In an academic meetings Dr. Mohd Ma’Sum Billah said: The most important jurisprudential problem of Bitcoin is lacking of law. Therefore a reform is essential.
On Tuesday, February 1, 2022, with the efforts of the Office of Islamic Studies on Cyberspace (OISC) the tenth live webinar titled “Cryptocurrencies from the point of view of jurisprudential rules and maqāṣid al-sharī” was held.
The meeting was organized by the Office of Islamic Studies on Cyberspace (OISC), in collaboration with Heyatonline, ABNA News Agency, and the Representation of the Supreme Leader in Farabi Campus of the University of Tehran.
At the beginning of the meeting, Shaykh Mahmoud Rafian, the scientific secretary of the meeting, said: Communication is an important element in this age. Therefore, today’s age is known as the “communication age”. People all around the world are rapidly sharing their images, articles and thoughts on the internet and social networks such as Facebook and Instagram, but there is still a lack of economic and fast exchanges between people around the world. cryptocurrencies like bitcoin have become a way to make quick profits for some, and huge losses for others. The Office of Islamic Studies on cyberspace has compiled Islamic researches on cryptocurrencies in a research work. The title of this book is “The Status of Islamic Studies on Cryptocurrencies in the World”. The book is an introduction to the identification of Islamic academic sources in the field of cryptocurrencies. In this work, an attempt has been made to consider and summarize all research works in Arabic and English. According to this book Pro Dr. Mohd Ma’Sum Billah is the top researcher in the field of Islamic studies on cryptocurrencies. he has written more than13 articles and books in this regard.
The scientific secretary of the meeting then introduced the speaker in this webinar. He said: Dr. Mohd Ma’Sum Billah, PhD, is a Malaysian. Currently he is a Professor of finance, insurance in King Abdul Aziz University, Saudi Arabia. He had also served as a director for the “Islamic Chamber of Commerce & Industry (OIC Countries), Jeddah, Saudi Arabia”, in charge of global trade & investment cooperation. He has written and published more than 200 articles in different refereed Journals, Encyclopedias & Medias on applied Comparative & Islamic finance. Dr. Billah had been sitting & contributing in his capacity as the member in more than 30 different boards of financial, academic, corporate & NGO organizations internationally, regionally & locally.
Dr. Mohd Ma’Sum Billah has written and published more than 10 articles about cryptocurrencies.
The titles of his works are as follows:
- Cryptocurrency? Its Halal Alternative Model
- SWOT Analysis of Halal Cryptocurrency Structure
- Innovative Action of Halal Cryptocurrency Management
- Halal Cryptocurrency: Its Establishment and Operational Mechanisms
- Shari’ah Paradigm of Risk Management
- Risk Factors in Cryptocurrency and Its Takaful Solution
- Digital Currency Takaful
- Islamic Cryptocurrency
- Investment in Halal Cryptocurrency
- Halal Cryptocurrency Managemen
- Islamic Financial Products
- Standard Shari’ah Regulatory Frameworks of Cryptocurrency
- Shari’ah Code of Ethics in Cryptocurrency
- Existing Regulatory Frameworks of Cryptocurrency and the Shari’ah Alternative
SWOT Analysis of Bitcoin and Cryptocurrencies
Dr. Billah first pointed to the Strength, Weakness, Opportunity and Threats of cryptocurrencies. He said: The strengths of cryptocurrencies are: Cost-less. It’s safe and secure way to buy goods from around the world without paying expensive banking fees. Easiest, Flexibility, Friendly, Sustainability, Border-less Platform, Less Tension with Minimum Threat, and Rebuild the World Economy.
Dr. Billah then mentioned some of the opportunities of cryptocurrencies. He said: cryptocurrencies have provided a great opportunity for profitability and entrepreneurship for some people and can cause an economic revolution, because in this model people with low income can also participate and make profits.
The director for the Islamic Chamber of Commerce & Industry in Saudi Arabia said: Threats in this area are as followings: Challenge to the Banking System. The Federal Reserve and international banking systems should be worried. Challenges to the Law & Order, Threat to the Public Revenue, No Legal Protection, No Sovereignty, Money Laundering, System Hazard by Hacks and Moral Hazard.
A Need of Reform is Essential
Pro Dr. Mohd Ma’Sum Billah said: It should be treated with current cryptocurrencies as commodity unless we have further research. Whereby we can treat the cryptocurrency as an alternative currency like during the time of the holy Prophet Muhammad that they have Dinner and Dirham. Why not, can have both fiat money, and also at the same time we have the alternative currency like cryptocurrency.
He added: Digital encryption using hash code is not enough. My suggestion here that in order to minimize the risk there should be a biometric encryption in addition to the digit. Reform in Regulatory and risk are essential as well. Standard Regulatory Frameworks shall be in Place. In their absence, the malpractice may take place and lead the system collapse. And risk plan shall be formalized against any defined catastrophe due to capital loss, technology failure, technical hazard and alike.
Jurisprudential Problems of Bitcoin
Responding to the question “What is the most important jurisprudential problem of Bitcoin?”
Dr. Mohd Ma’Sum Billah said: “There is no law, secondly there is no proper accounts. There is no any sovereign authority and sovereign control. Fourthly there is no risk plan and five there is no any investor security. He added: everybody can claim that there is no hack in Bitcoin, but we are talking based on the facts and phenomena not based on virtual talking only.
Halal Alternative Model of Bitcoin
In this meeting, the scientific secretary of the meeting, Hujjat al-Islam Mahmoud Rafian, asked: “There are now more than 2,000 cryptocurrencies in the world. Do you know an alternative model of bitcoin which compatible with Sharia?”
Dr. Mohd Ma’Sum Billah said: I mentioned about eight cryptocurrencies available in the world under sharia principle. There are some others also but I do not consider as a cryptocurrency yet. Maybe they are on the pilot program or testing period stage. But why not we should do the research and then continue the research and come up with a good model. I have developed very good model which is very different from many others. I come up with a model of crypto asset whereby it is going to be priced based on the Purchasing power parity, investors can achieve high Halal profits, almost 50 to 70 percent per week based on the sharia principle based on commodity not virtual thinking and assumption. I have explained this in detail in my book titled “Benchmarking Islamic Finance: A Framework for Evaluating Financial Products and Services”
Bitcoin – Cryptocurrency and the Issue of Unity
The scientific secretary of the meeting explored the opinion of Dr. Billah about the claim of the American thinker Mohammed Ibrahim Ludwick. He said: In some articles, one of the positive aspects of cryptocurrencies is considered to be the creation of unity among the people, especially Muslims. For example, in the book titled “The Islamic Economy in the Age of Bitcoin: The Rise of the Digital Ummah and the Internet of Trust” the author said: Bitcoin has brought together people of all imaginable geographic locations and ethnic backgrounds, all working toward a common goal. what is your idea about this?
Dr. Billah said: I appreciate this idea. you can see in the stock market and financial market, that peace will bring not at this moment today. Because in capital market only rich people participate. only the rich people whereby the middle class, low income group meet the zero-income group. They do not know what is the benefit all about in the capital market. The cryptocurrency is a platform which can bring everybody together, either a literate, or illiterate, poor or rich or the king. Everybody will come in the in the blockchain platform. No matter whether you are king or you are a laborer. everybody has this equal right. There is no discrimination. So, this is the only platform that we can bring together and we can really bring within the spirit of holistic spirit of brotherhood.