Contemporary Development in Islamic Finance Markets
Today, while the potential applications for blockchain technology seem endless, many companies are also exploring this technology in the Islam. Singapore-based FinTech firm, Finterra has developed a mass funding platform that uses blockchain to create smart contracts that will depend on specific waqf projects.
Distributed ledgers technologies and smart contract applications are creating a different world scenario that offers new and innovative ways to organize existing systems with cryptocurrencies every day. For Islamic charities, called the waqf, the blockchain is seen as the latest technology to be useful to them.
According to reports, the Singapore-based FinTech firm, Finterra has developed a mass funding platform that uses blockchain to create smart contracts that will depend on specific waqf projects.
A waqf typically involves donating a building, land, or other assets to Muslim religion or for a charitable cause, without intent to take back interest or fees. The basis of this concept is actually based on the Ottoman Empire.
Islamic Finance Markets
Finterra; hopes that this platform will be a more productive way to transfer management and raise funding for waqfs funding from Muslims for social projects of schools, mosques, and charities. About the project;
“We are trying to change financial areas in the approach of the mass funding and development in waqfs.”
said Finterra’s CEO Hamid Rashid.
The company aims to target core Islamic finance markets in the Middle East and Southeast Asia where pilot projects are being studied in Singapore, Malaysia and Indonesia. Finterra, which aims to continue and work until June, will organize a forum in Kuala Lumpur, Malaysia’s capital city, in March. Waqfs in Brunei and India were very interested in the project.
It is estimated that assets worth $1 trillion are held in waqfs around the world.
Because of the inefficiency of the waqf’s management, many assets are not being used for the purpose for which they are donated; the blockchain can handle this by increasing the efficiency of the potential of the asset by monitoring each contract in electronic form over the lifetime of the investment.
The fact that a school in Jakarta has been restored and converted into a proper property is a waqf project that is being examined now according to Rashid. It is thought that it will be the first for many people who benefit from blockchain technology.