In a move to break free from the established hegemony of the American dollar (USD), Islamic states are reportedly planning to develop a cryptocurrency customized for trading and distribution within the Islamic community.
Erol Yarar, Chairman of the International Business Forum (IBF), alleged that the USD has diverted from its original purpose of being an international trading currency and has instead become a ‘sanctioning tool.’
The Muslim-focused business lobby group, IBF intends to explore ‘monetary pluralism’ and implement ways and means to ensure a fairer and healthier trading ecosystem. With the objective to promote international trade among the Islamic countries, the planned Shariah-compliant digital currency will be used for pricing of goods by businesspeople, exchange markets and countries.
America’s recent renewal of economic sanctions against Iran seems to have prompted Islamic leaders to think of an alternative to challenge and undermine the dominance of the American dollar.
“The U.S. keeps down money transfers, imposes sanctions on the international market, and causes crises in countries by using the dollar,” Yarar stated.
He also highlighted the need to develop a fund backed by the Islamic countries on the basis of the business model of the International Monetary Fund. “The fund, based on non-interest finance principles, will help countries facing an economic crisis. The fund’s name can be International Islamic Cooperation Fund,” Yara proposed.
Yara’s ideas have raised questions on whether countries presently under full, partial or covert U.S. sanctions such as Cuba, Venezuela, North Korea, Iran, Zimbabwe, Syria, Russia, and Yemen could adopt a virtual currency to overcome the rigid economic policies.
Meanwhile, Venezuela has already launched its state-owned cryptocurrency, Petro. While Russia and China are aggressively investing in blockchain projects that will serve as alternatives to the USD in terms of global trade.
Earlier in October, the United Arab Emirates-based ADAB Solutions announced that it was working to launch the First Islamic Crypto Exchange (FICE) in 2019. The firm assures that FICE would operate ‘in accordance with the principles of Shariah law.’ This implies that all functions within the FICE framework would respect the Islamic law regarding financial operations.