Marhaba DeFi Network (MRHB), a Muslim-focused ethical decentralized finance platform, has called it “the world’s first” certification for non-fungible tokens (NFTs) that are halal compliant.
Hosted on MRHB’s SouqNFT Marketplace, the certifications can help companies bring transparency to their work, allowing them to “show their customers definitive proof that their business practices are halal and acceptable to Muslims.”
“The unreliable nature of NFT-based halal compliance certificates fulfills a pressing need in the halal economy sector, where certificate counterfeiting is common or difficult,” MRHB founder and CEO Naqib Mohamed told BeInCrypto.
“NFTs are unique and neither replaceable nor exchangeable – this makes them an ideal technology for immutable certificates,” he said. He added that the “first” institution to receive such halal compliance certification is Cash Gold, a Singapore-based gold crypto platform.
How does the certification process work?
Under the system, businesses that comply with Sharia law can now do so by being certified by London-based Sharia Experts Ltd., a halal advisory organization specializing in Web3 projects.
The company leverages the SouqNFT platform to issue and mint Halal certificates on the blockchain, in a new use case for NFTs. Until now, halal authentication was mostly done on paper or digitally, but it exposed users to “forgery and slow verification processes”.
Mohamed added that every project within the MRHB ecosystem is reviewed for humility and ethics, in line with Halal, an Arabic concept that is permissible under Islamic law.
While SouqNFT also hosts halal but non-certified non-fungible tokens, its screening process typically examines issues such as nudity, hate speech, racism and authenticity for all NFTs, whether in the form of images, videos or audios. Yes, he explained.
“The full transparency of blockchain also means that anyone can easily cross-check a certificate with the public key of a Sharia expert to verify beyond a shadow of a doubt that it was a specific Sharia advisory firm. Who mined the NFTs and issued the certificates. By default, NFTs include proof of ownership,” Mohammad said.
$2.7 trillion worth of Islamic finance sector is obsessed with bitcoin
Sharia compliance is an important customer requirement and regulatory requirement in many Muslim markets. But the legality of crypto assets like bitcoin (BTC) remains a matter of great controversy.
Prominent Islamic leaders have labeled bitcoin as “haram” – meaning that it is banned under Sharia law, as the asset can be used for illegal activities such as money laundering, gambling and fraud, according to the Quran. prohibited by.
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, Asarun Niyam Sholay, a prominent Islamic scholar in Indonesia, issued a religious proclamation, or fatwa, warning followers against crypto investing, saying “it’s like a gambling bet.”
Against this backdrop, Naqib Mohamed’s MRHB DeFi network is foraying into the NFT space, hoping to woo the conservative Muslim loyalist with its halal-compliant non-fungible tokens. According to UK Muslim financial platform Kardas, the network is aiming to tap the Islamic finance sector worth more than $2.7 trillion and serve a billion people. Explaining, Mohammed said:
“MRHB is effectively acting as a gateway for the flow of Islamic liquidity into the crypto market. When Islamic liquidity flows in, so will the interest in NFTs. We are creating a new market.”
Does Sharia Compliance Threaten DeFi’s Autonomy?
While MRHB considers itself to be decentralized, its halal compliance enforcement screening process could be equivalent to gatekeeping. This is a curse to the ethos of DeFi, which thrives on autonomy, challenging the status quo. But Mohammed said:
“We certainly control certain aspects such as listing and operations within a set of protocols, but once audited by the Sharia team, the decentralized aspects are not compromised.”
He explained that in addition to religious considerations, the basics of halal-compliant NFTs are also acceptable to those who do not follow Islam because the standard expectations generally coincide with ethical web practices.
The MRHB says it is building an ecosystem of DeFi products and services “specifically designed for morally conscious people such as Muslims.” In 2021, the organization raised $5.5 million in an initial Dex offering (IDO). Since then, it has launched a crypto halal wallet called Sahal and has partnered with 14 companies including Polygon.
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