Fintech adds Islamic finance capabilities

DUBAI: Canadian fintech company Goldmoney Inc has certified its gold-based financial products as sharia-compliant, the latest firm to combine blockchain technology to tap demand from Islamic investors.

The move illustrates how fintechs, companies that use innovative technology to revamp banking services, are broadening their footprint to include the core markets for Islamic finance in the Middle East and Southeast Asia.

Goldmoney provides financial products that are fully-backed by reserved gold and so fall in line with guidance issued in November by the Bahrain-based Accounting and Auditing Organization for Islamic Financial Institutions.

The firm began exploring sharia compliance in March of last year, said Alasdair Macleod, the firm’s head of research, adding its products will range from wealth management to the remittance market.

“We are already seeing growing demand from Muslim-majority countries, and take the view that being sharia-compliant will considerably raise our profile in this important market.”

Goldmoney says it has more than 1.3 million users across 150 countries and administers $1.7 billion in client assets.

Blockchain, a system that first emerged to facilitate digital currency bitcoin, involves a shared electronic ledger that allows all parties to track information through a secure network, removing the need for third-party verification.

Islamic finance follows religious principles such as a ban on gambling and outright speculation, but until now the sector has focused on traditional retail banking services. — Reuters