Bitcoin and Islam
BEING a public relations consultant means no two days are ever the same for me. Having diverse clients helps, and I am always learning about new things. One project in particular has given my brain an intense workout these past few weeks.
Cryptocurrency and Islam are two seemingly unrelated areas. On Monday we broke the story about the first mosque in Britain to accept Bitcoin and Ethereum — the world’s two mo st popular cryptocurrencies. The news went global. Shacklewell Lane Mosque, also known as Masjid Ramadan, has been inundated with media requests all week. The first interesting point to note is that this is the first Turkish-owned mosque in Britain. Indeed, the founders are of Turkish Cypriot origin, and here they are making history again.
Located in east London, Shacklewell Lane Mosque was established in 1977 by the late Ramadan Güney, a Turkish Cypriot businessman from Paphos. His son, Erkin, now heads up the charitable trust that administers the mosque, driving an impressive programme that is transforming the building into a very progressive place of worship and a local community hub. I confess a personal interest too — back in 1977, my father Oktay Hamit did the architectural plans to convert this former synago gue into a mosque, including the huge dome at the top. Funerals of many London family members and friends have also been conducted here.
Forty years on and the building desperately needs money for vital repairs. These include new toilets and washing area, and a new kitchen, to be used to help feed the local poor — and sadly there is no shortage of that on the mosque’s doorstep in Dalston. As a funeral director, Erkin is also keen to generate a charitable pot to help Muslim families who cannot afford to bury their loved ones. The cost of even a frugal burial in London is upwards of £5,000. As Erkin remarks: “It’s hard for the living to find that money, let alone the dead.”
Ramadan is the holiest of months for Muslims, who fast for 30 days, fulfilling one of the five pillars of Islam. The experience helps them to focu s on their spiritual wellbeing and renew their vows to God. It’s also when all but the poorest must donate 2.5 per cent of their wealth to charity. This obligatory alms-giving is called Zakat.
A friend of Erkin’s involved in financial technology suggested the mosque start accepting cryptocurrency because there are many Muslim users who need to pay Zakat on their earnings from these digital assets. That is how t his small mosque in east London started its path to making history.
The first transactions of Bitcoin started in 2009. Today, there are over 1,800 different cryptocurrencies in circulation and their usage is growing rapidly. There were an estimated 20 million users in 2017 and it’s likely that figure has shot up this year. The total value of these digital currencies now exceeds £290 billion, helping to attrac t new users and investors. Experts believe some 200 million people will be using them by 2020. Stories that a single Bitcoin is today worth £6,500 certainly help, with many early adopters becoming millionaires!
Several leading Western and Islamic experts have spoken out against this new digital money. According to Turkey and Egypt’s müftüs (religious heads) and prominent Islamic scholars, cryptocurrency is bad and should not be used by Muslims. The view is shared by Mark Carney, the head of the Bank of England, who has described them as “failed currency”. With no signs of their popularity abating, Carney is now calling for their regulation.
Cryptocurrency is decentralised, so it not controlled by any government. It has its own rules and those involved in administering their usage apply these rigorously, but as the y operate outside the world’s banking and financial systems, there is deep mistrust and suspicion. Users are protected by anonymity: the technology is safe, secure and encrypted, preventing their identities being revealed. Unsurprisingly, it has become a preferred means of transaction for criminals and others with unlawful intentions, including those wanting to bypass international sanctions on state s.
Criminals also use paper currency, but no-one is issuing a fatwa against this type of money or planning on stopping our usage of it as a means of fighting crime. Yet with so few Islamic voices in favour, media worldwide were fascinated how a small mosque in east London could take such a bold step.
The imams and religious advisers at the mosque studied the views on both sides. The base line is what the Koran says; Muslims believe God laid down all that was “haram” (banned) in His holy book. Coins are not one of those items, so whether in gold or paper, or now digital, money transacted according to Islamic finance rules — no interest, no speculation, and honesty and consent by both parties — is “halal” (permitted). There may be issues with the system behind it, which can be improved upon to prevent abuse, but esse ntially there is nothing wrong with digital money. Indeed, as some pro-cryptocurrency scholars note, there was a time when people objected to paper money, wondering how that could replace gold as a form of payment. But it has. As one of the mosque’s religious advisers, Zayd al Khair, explained, debate is healthy for any society and the fact it exists in Islam also demonstrates it is not a “top-down” faith. Interpr etation of the scripture is open to all. Obviously, it helps if you have a good understanding of Islamic doctrine or can be reliably guided by others who do.
At a time when conventional Western banking systems have failed us so badly, we should not be quick to dismiss alternatives simply because those with vested interests tell us we should. Here in the TRNC and over in Turkey, we are suffering huge losses due to speculation on the Turkish lira, its value dropping daily. The UK and rest of the world have been hit by many financial excesses, including the sub-prime mortgage crisis of 2007-08, Black Wednesday in 1992, Black Monday in 1987, and the granddaddy of them all, the Wall Street Crash of 1929. If speculation, banned under Islamic rules, was not standard practice it’s likely these incidents would never have oc curred. With the advent of blockchain technology that powers cryptocurrency, it’s a good time to explore alternative ways of how the world manages its finance. Even for non-believers, Islam offers lots of important principles in creating a system of “caring economics”. Well done to Shacklewell Lane Mosque for helping to pioneer a new way of doing things.