Korean news outlet IT World reported on June 18 that South Korean blockchain lab IncuBlock signed a Memorandum of Understanding (MOU) with the Malaysian government for Blockchain technology development compatible with Sharia law.
Blockchain technology is currently in use, tracking halal foods, as the UK-based startup HALAL TRAIL stated using the technology to track livestock and fresh food from farm to table through the halal food chain.
A Malaysian government committee, the Majlis Perundingan Melayu (MPM), will work with IncuBlock and the MPM’s international partner, Global Cornerstone Group on the development of a blockchain platform and a decentralized application (DApp) to ensure it meets the requirements to be considered Halal by the country’s Sharia Commission.
IncuBlock’s CEO, Kwon Won-Seon, says that his firms experience with blockchain will be a great asset to the project, stating that:
“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.”
Financial institutions in the Islamic world currently can’t answer whether or not Bitcoin can be considered Halal as Bitcoin (BTC) and cryptocurrencies are not clearly defined as money according to Islam.
Last April, an Indonesian fintech startup released a report that stated Bitcoin is generally permissible under Sharia law. The report noted that crypto’s wide acceptance and reliance on blockchain made it more secure than other current financial systems. The fintech’s report ended with a warning to the Islamic community, asking them to be mindful of initial coin offering (ICO) scams that target Muslims which promote fixed returns as a “halal” investment.
Dato Hassan Binhmad of the MPM says he hopes the collaboration with IncuBlock leads to the development of Blockchain technology, and he hopes that the result will be used in the Islamic world.