MANUSCRIPT FOR RAMADAN PANEL DISCUSSION

Moderator:

Hello, welcome to the Qitmeer Ramadan Roundtable discussion, I have with me Mr. Abdullah, Dr. Abdulsalam, and Mr. Abdulsalam. Mr. Abdullah is the Co-founder of the Qitmeer network, Dr. Abdulsalam is the Director of Qitmeer in Nigeria, Mr. Abdulsalam is the Community moderator of the Qitmeer network.

Can you introduce yourselves briefly?

Mr. Abdulasalam:

My name is Abdulsalam, I am a community manager at Qitmeer network, I am a Nigerian, and I studied Mathematics at the University before delving into the world of blockchain.

Dr. Abdulsalam:

I am Dr. Abdulsalam, I am from Nigeria, a Lawyer, and also a blockchain and Islamic finance expert.

Mr. Abdullah:

Thank you, guys, for the invitation, my name is Abdullah. I am originally from China but have stayed in Dubai, Nigeria, U.S.A. I have a track record in the area of Islamic Finance.

Moderator:

Thank you for the introduction, Mr. Abdullah, as our co-founder can you give us a keynote speech and tell us about the origin of the Qitmeer network and what we are doing at Qitmeer network?

Mr. Abdullah:

Thank you for the opportunity to speak with the community about the Qitmeer network and Islamic finance in Web3. Before I begin, it is important to acknowledge that the Web3 and blockchain space face significant challenges and arguments. Adoption is difficult and we in the crypto space face arguments and challenges from mainstream people regarding concrete solutions for financial inclusion. Compliance is another concern, as some individuals engage in scams and crises in our industry. After five years in this industry, it is important to reflect on the way forward and what we can do to deliver something concrete.

In terms of Qitmeer, I want to talk about our solution, commission, future, and underlying values and philosophy. As the first person to promote Islamic finance globally, I can attest to the fact that Islamic finance is not just for Muslims; it is a financial system based on asset, risk sharing, and interest-free practices. After the 2008 financial crisis, the Western world began to question the existing practice of interest and started to consider alternatives. This is why Islamic finance gained popularity after 2008, including in China and the UK.

Islamic finance is not rocket science; it has been practiced for over a thousand years. The Islamic finance system is based on interest-free banking and is a well-accepted legacy and value practiced for thousands of years. We should not be distracted by the name but should instead look at the underlying values, philosophies, and real benefits that it brings to society. It is important to note that most of the Islamic bond subscribers and insurance customers are not Muslim.

Likewise, Qitmeer, Bitcoin, and Islamic finance share similarities. One major instability that causes the financial system to suffer is oversupply. In Nigeria, for example, as a businessman doing business there, I witnessed the exchange rate shift from 90 naira to $1.00 to 150 naira to $1.00. This instability is due to oversupply, and it is important to address this issue.

In conclusion, I want to emphasize that Qitmeer is committed to Islamic finance and is determined to help solve financial inclusion issues in our industry. We believe that our solution can deliver something concrete and widespread adoption in the industry. Thank you.

Moderator:

Mr. Abdullah, could you please explain how Islamic finance aligns with the principles of blockchain technology, as there seem to be conflicting opinions on the matter? Additionally, could you shed some light on the use of blockchain technology in finance, particularly in the Islamic finance industry? Thank you.

Dr. Abdulsalam:

Let me begin by introducing Islamic finance, which is a type of financial activity that adheres to Sharia principles and is applied in the development of the Islamic economy. In Islamic banking and finance, certain principles are followed, such as avoiding transactions that involve usury and ensuring that products are ethically and morally sound. Interest is also prohibited in Islamic finance. These core features define Islamic finance. Additionally, I believe Mr. Abdullah can continue with the discussion on it if that is what you would like me to do.

Mr. Abdullah:

Sure, let's do this. I want to talk about the relationship between Islamic finance and blockchain technology. Some people are hesitant to adopt new technologies because they feel insecure or unsure about them. This happens a lot when it comes to outer space and technology, but it also happens with Islamic finance and ethical finance.

Using blockchain technology with Islamic finance can help make the process more efficient, transparent, and traceable, while also making sure it follows Sharia values. However, in practice, only 85-90% of Islamic finance products are actually interest-free and involve risk sharing. To make sure products are in compliance with Sharia values, a complex legal structure has been created, but it hasn't solved the problem of financial inclusion.

To create more impactful, realistic, and substantial benefits for consumers and society, we need to use blockchain technology. The current financial system is centralized, with only one public blockchain (the US Reserve) that controls and influences other fiat money systems, including Islamic finance. This means that the most important power in the financial system is the power to print money, which only the US Reserve has access to. As a result, Islamic finance cannot build an independent and free system because it is sitting on top of the traditional finance system.

To solve this problem, we need to embrace blockchain technology, which allows for more inclusive participation in the financial system. Any country that has access to energy and computing power can participate, including emerging economies like Pakistan, India, China, Nigeria, and Ghana. Proof of work is a great option for these countries because it is not limited to one person or entity. Proof of stake, on the other hand, promotes decentralization but is more like promoting shares of another company.

In summary, blockchain technology and Islamic finance can work together to create a more efficient, transparent, and traceable system that follows Sharia values. However, to fully embrace this technology and build an independent financial system, we need to move away from centralized control and adopt more inclusive and decentralized systems like proof of work.

Dr. Abdulsalam:

Before we move on to the next question, I'd like to add to Mr. Abdullah's keynote speech regarding the root causes of blockchain and Islamic finance. In my view, they are interconnected, as both are influenced by the notion of "transparency" that Mr. Abdullah also touched upon. One of the fundamental principles of Islamic finance is transparency in all dealings, which is similar to the outcomes of blockchain technology, where transparency is achieved through fulfilling certain principles. It is essential to ensure that these principles are upheld in every transaction. By doing so, we can regulate and control them effectively. Let's proceed to the next question.

Moderator:

Thank you. I appreciate your thoughtful contributions. Firstly, I'd like to express my gratitude to Mr. Abdullah and you for sharing your valuable insights. I'd like to address this question to Dr. Abdulsalam regarding the challenges that Islamic finance faces in relation to blockchain adoption. Specifically, what ethical and regulatory challenges have arisen, and how can they be addressed? As you know, the local industry has faced several challenges in the past few years, including court cases and SEC issues.

Dr. Abdulsalam:

Thank you. As Mr. Abdullahi pointed out earlier, Islamic finance and blockchain share common root cause such as transparency, decentralization, and trust. However, in the context of Islamic finance, there are both ethical and regulatory challenges. Let's first address the ethical challenges. For example, there are inefficient practices and implementation issues with Islamic products, leading to problems with traceability and accountability. Blockchain can help to ensure traceability and enhance the implementation of Islamic finance.

Now, turning to regulatory challenges, Islamic finance faces various regulatory issues. For instance, in Malaysia, banks are not allowed to enter into certain transactions under the Bank Act. However, Islamic finance as a bank wants to enter into partnerships, which requires a new law. The Shariah-compliant Islamic Finance Act was introduced to address such issues. Blockchain can help in enhancing transparency, which is critical for impact finance like Islamic finance. With data available to auditing bodies, stakeholders, and investors, transparency and traceability can be ensured, thus improving both regulatory and ethical issues in Islamic finance implementation.

Mr. Abdullah:

My proposal is to conduct pilot testing of this concept in a controlled environment, such as a container, to establish the contact information layer and test the physical labor required to implement the idea. This will require collaboration with visionary leaders and government officials at the federal level, as well as building partnerships to ensure the success of the project.

Moderator:

In the realm of Islamic finance, there exist Islamic scholars who have provided their perspectives on how blockchain can be utilized. The question is, how can these scholars collaborate with blockchain developers and finance experts to develop Sharia-compliant solutions using blockchain technology? This collaboration could be achieved by bringing together Islamic scholars, finance experts, and blockchain developers to jointly work on creating solutions that adhere to Sharia principles.

Mr. Abdullah:

Actually, we have a team of globally recognized Islamic scholars, including Professor Abdus Salam, Dr. Farooq Habib, and Dr. Abdul Salam, who all hold PhDs in Islamic finance and are Shariah experts. They have been part of our foundational team since the inception of this project. We are launching a global initiative called "Islamic Finance 4.0," but we recognize that awareness and education are crucial before adoption can occur. Without a certain level of understanding and acceptance of blockchain and Islamic finance, adoption would be in vain. We are aware of the challenges we face and are working to address them. In the future, we will continue to improve our practices and ourselves.