The General Council for Islamic Banks and Financial Institutions (CIBAFI) and the Islamic Corporation for the Development of the Private Sector (ICD) joined forces for the second time this year to fuel a discussion on “Cryptocurrencies – A Double-edged Sword: Challenges and Opportunities for Islamic Finance”.
Cryptocurrencies have been emerging as a new digital means for payment facilitating efficient, convenient, and secure transactions. They constitute one of the most innovative and disruptive applications of fintech in the Islamic financial services industry, generating a series of debates and regulatory unclarity. For this reason, the 2nd ICD – CIBAFI webinar gathered industry experts to discuss the different views on cryptocurrencies. It highlighted how cryptocurrencies can be used to achieve financial inclusion and development, supporting the growth of the Islamic finance industry.
In his welcoming remarks, Mr. Ayman Sejiny, Chief Executive Officer of ICD highlighted the opportunities that blockchain driven applications can bring to the development agenda, including the promotion of financial inclusion and the growth of the Islamic finance industry in particular. Mr. Sejiny said that shariah-compliant adaptation of cryptocurrencies will be, remarkably, a major milestone in the Islamic Finance industry. And the recent adaptation of blockchain various applications show how the acceptance level for cryptocurrencies and other applications are increasing amongst Islamic banks”.
“From the development perspective and with an aim to contribute to the promotion of financial inclusion, ICD has built a FinTech platform to offer blockchain driven financial services for usually unbanked and underserved individuals and small and medium size enterprises. ICD will continue exploring practical shariah compliance opportunities to further enhance its FinTech platform with smart sukuks issuance, asset tokenization, zakat and Sadaqah collection for development purposes” he added.
While, in his welcoming remarks, Dr. Abdelilah Belatik, Secretary General of CIBAFI said: “Today’s global finance industry is confronted with a wave of disruptive trends and important new developments in digital technologies. Cryptocurrencies are an example of these transformative trends for the future of digital and Islamic finance. We are pleased to collaborate for the second time with ICD to highlight how cryptocurrencies can be embraced and supported for the growth of Islamic finance”.
“In the same context, CIBAFI in support of these advancements have recently established an Innovation and Technology Working Group (ITWG). This group will conduct various initiatives with the aim of strengthening the adoption of financial technologies within the Islamic financial services industry. These initiatives include encouraging innovation and product development activities that are in line with the industry developments and Shariah objective, among many others”.
The Webinar included two panel sessions. The first panel witnessed the participation of Ms. Sandra Ro, Chief Executive Officer, Global Blockchain Business Council, Switzerland; Dr. Hilal Houssain, Lead Specialist - Knowledge Solutions, Islamic Development Bank Institute (IsDBI); and Dr. Abdullah Khamis, Principal and Fintech Expert, Islamic Corporation for the Development of the Private Sector (ICD). The session’s discussions focused on the effects that the emergence of cryptocurrencies has on the financial system and the regulatory interventions by central banks.
The second panel, on the other hand highlighted how to embrace cryptocurrencies for the growth of Islamic finance. The session panelists included Dr. Shakil Muhammad, Co-founder and Chairman, RNS Solutions, Pakistan; Dr. Mohamed Elgari, Shariah Scholar, Kingdom of Saudi Arabia; Mr. Ali Cihan Kestir, Chief Executive Officer, Turkey and MEA Region, Caiz Holding AG; and Mr. Mustafa Adil, Head of Islamic Finance, Data and Analytics, London Stock Exchange Group. The sessions were moderated by Mr. Rachid Ettaai, Senior Research Analyst at the General Council for Islamic Banks and Financial Institutions (CIBAFI).
CIBAFI and ICD thanked all the speakers and participants from various sectors and countries for their active involvement and contributing significantly to the success of the Webinar.
CIBAFI is an international non-profit organisation established in 2001 and headquartered in the Kingdom of Bahrain. CIBAFI is affiliated with the Organisation of Islamic Cooperation (OIC). It represents the Islamic financial services industry globally, defending and promoting its role, consolidating co-operation among its members, and with other institutions with similar interests and objectives. CIBAFI has over 130 members from 34 jurisdictions, representing market players, international intergovernmental organizations and professional firms, and industry associations.
The Islamic Corporation for the Development of the Private Sector (ICD) is a multilateral development financial institution and member of the Islamic Development Bank (IsDB) Group. ICD was established in November 1999, to support the economic development of its member countries through the provision of finance for private sector projects, promoting competition and entrepreneurship, providing advisory services to the governments and private companies, and encouraging cross border investments. ICD’s shareholders consist of the IsDB (rated ‘AAA’), 55-member countries and 5 financial institutions from the member countries. ICD is rated ‘A2’ by Moody’s, ‘A-’ by S&P and ‘A+’ by Fitch. ICD establishes and strengthens cooperation and partnership relationships with an aim to establish joint or collaborative arrangement for financing and promoting the growth of private sector enterprises in its member countries. ICD also applies financial technology (Fintech) to make financing more efficient, comprehensive, and inclusive.