Over the past 48 hours, tech news outlets have been abuzz with the announcement that Noorcoin, a sharia-compliant crypto-token system, launched its application demo at a session of the Islamic Chamber of Commerce, Industry and Agriculture or ICCIA.
From Saudi Arabia to Indonesia and beyond, governments are looking at rolling out applications of this new cryptocurrency offering specifically made for the purpose of integrating Islamic cultural values with new digital currency trends.
In looking at the possibilities with Noorcoin, and what it can do for markets, it’s important to understand the broader context: shariah finance is set up to handle Islamic prohibitions about usury and other laws promulgated by reading of the Quran and traditional Islamic values.
For instance, various types of speculation are seen as gambling or usury and prohibited under Islamic law, which many Middle Eastern countries and other nations around the world still ascribe to in some form. That means that shariah compliance is a major hurdle in crypto adoption in these parts of the world, and by the same notion, when a new crypto coin is designed to be shariah-compliant, that opens doors.
Leaders at Noorcoin have made it clear that the purpose of the application demo is largely to break into these markets by promoting public awareness – by dealing with the idea being that cryptocurrencies are inherently against shariah law.
“The purpose of the application demo is not only to test the technological issue, but also the cultural and legal environment in each 57 OIC member countries,” said Noorcoin COO, Thomas Yudhistira, according to today’s reporting at Cointelegraph. “For example, there is a widespread misconception towards cryptocurrency in the Middle East due to the notion that it is against Sharia law. …. Noorcoin is developed with sharia compliance in mind so we are positive that we would be compliant to national sharia regulations, which to be proven …”
Yudhistira also makes it clear that the current form of Noorcoin is the testnet and not the mainnet implementation phase assumed to be forthcoming.
To be clear, some Islamic clerics have in the past come out for cryptocurrencies and pushed back against the idea that coins can’t be shariah compliant.
If it’s an option to simply promote existing coins like Bitcoin as being shariah compliant, some might ask what role is filled by a specifically shariah-minded coin: still, it seems there is a value in being designing a cryptocurrency specifically for shariah compliance.
“The use of digital money in Islamic countries is very important,” Ambassador of the Kingdom of Saudi Arabia to Indonesia Osamh Mohammed Abdullah Shuibi said reportedly at the launch, explaining that doing this serves the prupose of dealing with existing financial problems related to pegged values. “In addition to facilitating transactions, the main objective is to reduce the dominance of the U.S. dollar. Noorcoin, the first digital Islamic money, can be used for Umrah and Hajj services, as well as inter-state transactions. There are three advantages that Noorcoin has, namely transparent, safe and low cost. At present some countries are experiencing a weakening of the currency against the US dollar. We must have an alternative.”
In a very real sense, the story of Noorcoin is quite like others – like a piece we published just a few days ago about applying blockchain principles to cattle trading in Myanmar.
The applications tie a very broad technology to very specific cultural practices and markets. And that’s part of the big value that has investors piling on for the long term into stocks like BTC and other cryptocurrency sector offerings.