Islamic Finance and Cryptocurrency
Cryptocurrency has certainly caught the attention of many particularly since many believe that this may be the future of currencies. There are different views on the matter and the main concern seems to be regulation. During a breakfast meeting organised by the Malta Institute of Management in celebration of the 10th Anniversary from the adoption of the Euro in Malta, this subject was also mentioned by the former Minister for Finance, Mr. Tonio Fenech. Mr. Fenech was the Minister responsible during the adoption of the Euro.
During his delivery, Mr. Fenech quoted various citations particularly from the US Federal Reserve that clearly indicate that against popular belief there are no Gold Reserves behind the currency. Same may be said to all other currencies. In this context, Fenech said that the paper money we use has no value other than the goods it manages to buy. With this argument money is only a measuring and bartering tool and nothing else. With this in mind one may clearly understand better the financial crisis of 2008 and how it came about. If money is purely a means of measurement then it cannot be treated as a commodity. To the contrary, conventional finance has been treating money as a commodity and it still does. To the contrary, in Islamic Finance, money has always been considered as a way of measurement and nothing else. You cannot make money out of money.
Cryptocurrency has taken a two fold view. Many people are looking to it as an investment which in reality it’s investing in absolutely nothing and the price is determined by an algorithm which many of us do not understand. On the other hand it can be a medium of exchange and it can serve businesses in many ways such as the raising of capital for growth. In the case of the first point of view, cryptocurrency cannot be considered as Shariah Compliant as it is making cryptocurrency out of cryptocurrency (money out of money) and therefore there is Riba. On the second instance cryptocurrency is a purely medium of exchange and measurement. Consequently it serves the same function as any other currency. The main problem remains on who determines the value and the fact that to date it is not regulated. On the other hand it is the future in this technological world. Mr. Fenech in the aforementioned presentation questioned on whether the Euro can actually be a Cryptocurrency This is a view that European Central Bank should be looking at, as it would assist the world in going in the direction that everyone seems to go and at the same time ensuring stability and proper regulation.
This topic shall be discussed in more detail during a conference organised by the Malta Institute of Management on 26 June 2018 which shall be launched by Parliamentary Secretary Hon Silvio Schembri. The conference shall aim to highlight the business opportunities that there may be with cryptocurrency in the current scenario and also in a scenario whereby the sector is regulated.
The International Tax Conference
The 12th edition of the International Taxation conference organised by the Malta Institute of Management shall take place on 6th April 2018.
The conference has attracted various international speakers as every year with speakers like Prof Pasquale Pistone who has been supporting the conference for a number of years. The main sponsors of the company are EY, Erremme Business Advisors, KPMG and Nexia BT.
MIM would like to take this opportunity to thank all speakers, sponsors and participants for their continuous support year on year to this unique event in Malta.
VAT and the EU
The Malta Institute of Management shall be giving details of the VAT and the EU conference in October and the relative Awards during the International Taxation Conference. Persons not being able to attend to the said conference and would like to receive more details are kindly requested to send an email to cbc@maltamanagement.com.