South Korean blockchain lab IncuBlock has signed a Memorandum of Understanding (MOU) with a Malaysian government advisory committee for blockchain tech development permissible under Sharia law, local news outlet IT World reported yesterday, June 18.
Blockchain tech has previously been used in terms of tracking halal foods, as UK-based HALAL TRAIL has begun using blockchain to track livestock and fresh food from farm to table through the halal food chain.
The committee, Majlis Perundingan Melayu (MPM), will work with both IncuBlock and MPM’s international partner, Global Cornerstone Group, on sharing knowledge and developing a blockchain platform and a decentralized application (DApp) that will meet the “social requirements” to be considered halal (permissible) by the Sharia Commission.
Kwon Won-seon, CEO of IncuBlok, said that the company’s experience with blockchain will be an asset to the collaboration:
"I will make a great effort to utilize the know-how of the blockchain we have accumulated over the years to develop the Islamic blockchain platform practically."
Cryptocurrency’s place in Islamic banking and whether it can be considered halal cannot be answered simply, as Bitcoin (BTC) is not concretely defined as money according to Islam.
In April, a fintech startup in based in Indonesia released a report stating that Bitcoin is at least “generally permissible” under Sharia law, noting that crypto’s wide acceptance, lack of control by a central authority, and reliance on blockchain could make it more secure than current financial systems. The report concluded by warning the Islamic community to be wary of initial coin offering (ICO) scams preying on Muslims that promote fixed returns as a “halal investment.”
Dato Hassan Binhmad, Chairman of the Malaysian Government Advisory Committee (MPM), said in regards to the MOU that he hopes the collaboration will “lead to the development of blockchain technology that will be led by Malaysia and be used throughout the Islamic community.”