Islamic banking presents a unique approach often in conflict with the pre-sets of western banking systems. The difference inn approach has several benefits – but require careful structuring if a bank wishes to offer its market Sharia compliant investment and credit products that are comparable to those in the west. Blockchain technology is decentralised, which directly challenges ideas like central counter-party and intermediary roles that lead to more predictable and fixed risk fundamentals – an approach that is mirrored in Sharia law.
Blockchain technology then, thanks to the decentralised foundation, lowers the cost and effort to deploy sophisticated financial systems than ever before, while ensuring easy and even increased compliance with Sharia law – as blockchain products start out compliant, with support to add complexities on top to mirror the role of western financial products, where traditional financial systems in contrast are designed from the ground up to have variable interest rates, changing debt instalments, and produce other outcomes that are unacceptable “gharar” (uncertainty) under Sharia law.
Thus, in traditional systems new rules have to be built to restrict existing platforms to service Sharia products, where blockchain products require no such restriction.
XAR Network prides itself on being able to build bespoke and regulatory compliant networks in accordance with our clients’ needs. One of the areas of focus for XAR Network has been Islamic banking and Sharia Law compliance.
We partner with governments and banks to bring a customised solution, depending on the specific requirements and laws, and facilitates the interoperability with emerging and existing systems.
We help governments leapfrog outdated platforms by integrating and implementing systems based on blockchains and smart contracts to create a model for an independent financial future, without prejudice.