• Marhaba, a DeFi platform, enters the $3 trillion Islamic finance sector with Halal-compliant NFTs

  • Marhaba DeFi Network (MRHB), a Muslim-focused ethical decentralized finance platform, has launched what it calls the “world’s first” certificates for halal-compliant non-fungible tokens (NFTs).

    The certifications, which are hosted on MRHB’s SouqNFT marketplace, might help enterprises bring transparency to their work by allowing them to offer “definitive proof to their clients that their business processes are halal and acceptable for Muslims.”

    “The trustless nature of NFT-based halal compliance certifications fills a pressing need in the halal economy sector, where certificate forgeries are common or difficult to validate,” MRHB founder and CEO Naquib Mohammed said.

    “NFTs are unique and neither replaceable nor interchangeable — this makes them a perfect technology for immutable certificates,” he added. He claims that Cache Gold, a Singapore-based gold crypto platform, is the “first” to get such halal compliance certification.

    What is the certification procedure?

    Businesses seeking to comply with Shariah law can now do so by becoming certified by Shariah Experts Ltd., a halal advice firm specializing in Web3 projects situated in London.

    In a novel use case for NFTs, the company uses the SouqNFT platform to issue and mint halal certificates on the blockchain. Previously, halal certification was largely done on paper or digitally, which exposed users to “forgery and delayed verification processes.”

    According to Mohammed, every project in the MRHB ecosystem is examined for modesty and morality in accordance with halal, an Arabic notion indicating what is allowed under Islamic law.

    While SouqNFT also hosts halal but non-certified non-fungible tokens, its screening procedure normally checks for nudity, hate speech, racism, and authenticity for all NFTs, whether in the form of a picture, video, or voice, he noted.

    “The complete transparency of blockchain also means that anybody can easily cross-check a certificate with Shariah Expert’s public key to verify beyond a shadow of a doubt that it was this specific Shariah advisory firm that minted the NFT and issued the certificate. By default, NFTs incorporate proof of ownership,” said Mohammed.

    Bitcoin is frowned upon by the $2.7 trillion Islamic finance sector.

    In several Muslim regions, Shariah compliance is a key customer need as well as a governmental necessity. However, the validity of crypto assets such as bitcoin (BTC) remains a hotly debated topic.

    Prominent Islamic leaders have declared bitcoin “haram,” which means it is unlawful under Shariah law because the asset might be used for illegal acts such as money laundering, gambling, and fraud, all of which are prohibited by the Quran.

    Concerns have also been raised about a lack of central authority and how digital currencies deprive governments and central banks of control over national monetary systems. In November, Asrorun Niam Sholeh, an Indonesian Islamic scholar, issued a religious proclamation, or fatwa, warning followers against crypto investment, claiming “it’s like a gambling bet.”

    In this context, Naquib Mohammed’s MRHB DeFi Network is entering the NFT arena, hoping to entice the conservative Muslim devout with its halal-compliant non-fungible tokens. According to the UK Muslim financial platform Qardus, the network intends to tap into an Islamic finance sector worth more than $2.7 trillion and serving one billion people. Mohammed elaborated, saying:

    “MRHB is effectively working as a gateway for Islamic liquidity to flow into the crypto market. When there is Islamic liquidity flowing in, then there will be rising interest in NFTs as well. We are creating a new market.”

    Shariah conformity jeopardizes DeFi’s autonomy?

    While MRHB claims itself to be decentralized, its halal conformity enforcement screening processes may be considered gatekeeping. This is antithetical to the DeFi culture, which values individualism and challenges the current quo. However, Mohammed stated:

    “We definitely control certain aspects, such as the listing and operations, within a select set of protocols, but once audited by the shariah team, the decentralized aspects are not compromised.”

    He noted that, aside from religious issues, the fundamentals of halal-compliant NFTs are acceptable even for non-Muslims because the baseline expectations align with what is widely regarded ethical web practices.

    According to MRHB, it is creating an ecosystem of DeFi products and services “particularly designed for ethics-conscious people like Muslims.” The company raised $5.5 million in an initial dex offering in 2021. (IDO). Since then, it has released the Sahal crypto halal wallet and collaborated with 14 firms, including Polygon.

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