The Bitcoin Guide

Thank you brother for your considered comments. In matters of Shariah - I don’t disagree with any of what you say. My position is based on market practice - which is allegedly directly from modern Shariah standards. In fact your position tends to confirm my points. Before I explain, I should clarify something important. I have always been a massive supporter of our Deen with regards to financial matters. Some years ago I delivered a series of webinars (four were originally planned) discussing Hadith (on dates and related matters) and how we can faithfully derive complex requirements for the successful operation of financial markets from them. This series extended to 26 weeks. I have always maintained that scholars in Islamic finance are sincere. This has never been in question. I have written several papers which discuss the diversion of modern Islamic finance from the principles laid out by our Deen. I mention them only to provide context for my position I also believe AAOIFI is generally making sincere attempts to align modern shariah standards to faithful requirements of our Deen. The point is that modern islamic finance operates - In spite of Shariah standards - in a cohesive and observable and repeatable manner. The market delivers interest rate products consistent with the wider debt based economic system in which the Islamic banks operate. The outcomes are observable. 95% of global Islamic finance assets (of around $6 Trillion) are interest based – my own analysis. The balance sheets of Islamic banks are around 95% dominated, both assets and liabilities, by interest rate products whose pricing and behaviour reproduce the conventional banking system. Again my own analysis and this is publicly available. These are products that deliver debt and credit while generating time-priced returns economically equivalent to interest. This is deliberate. I have also written how Islamic banks are 40x more profitable when they deliver debt and lending compared to actually investing in assets. Their actions are entirely rational. Common institutional implementations of commodity Murabaha do not comply with key AAOIFI requirements, including those concerning agency, onward sale and possession. The then Chairman of Dubai Islamic bank’s Sharia Supervisory Board and an AAOIFI Sharia Board member has publicly written about this. His stated position concerned institutional Tawarruq as a prohibited practice. One major attempt by Islamic banks to move away from commodity Murabaha has been Interbank Wakala. The white paper for this product explicitly covers practitioners stating that the return should be known and effectively guaranteed. The scholars say this is impermissible and that this cannot be communicated to the other party as this would contravene Shariah principles. Yet such institutions have Shariah approval from their Shariah board. Often involving Scholars whose institutional memberships often overlap with membership of AAOIFI’s Shariah Board In addition - the Sukuk market operates - again - not in accordance with AAOIFI Shariah standards. The additional resolutions in 2008 relating to Sukuk were not new - they were a clarification and reaffirmation of the existing Sukuk standards - again which the market was ignoring. One of the four books in my series is wholly on Sukuk and covers this in detail. I would be happy to share this book with you if you wish. All Sukuk are presented and certified as Shariah-compliant, despite their economic and contractual defects. Scholars whose membership of AAOIFI often overlap are the ones who then provide Shariah approvals for Sukuk deals that don’t align with these standards. A study at INCEIF examined nearly 900 Malaysian corporate Sukuk issued over 15 years. Only 86 used mudarabah or musharakah risk-sharing structures. None of those 86 was genuinely risk-sharing in substance, and 97% required repurchase at face value. I have personally reviewed dozens of Sukuk prospectuses and found none to be compliant with AAOIFI standards and in fact are clearly in contravention of them. I have found no legal Sukuk documentation containing unqualified issuer representation that the entire Sukuk structure and all transaction documents comply fully with all applicable AAOIFI Shariah Standards. This is market practice. All are signed off by scholars. I have a long youtube video showing precisely how market practice structures these Sukuk. The market prepares its desired and necessary outcome - which is overwhelmingly debt and credit and lending - and then introduces scholars to provide the ratification. This structurally marginalises scholars and leaves them with insufficient institutional power to alter the market’s dominant economic outcomes. Individual interventions may occur, but they have not altered those aggregate outcomes. A more precise way of restating my more sweeping statement that modern islamic finance has made Shariah and scholars irrelevant would be this: the institutional Shariah apparatus has proved incapable of stopping the market’s systematic movement towards riba replication. At the same time, that apparatus continues to approve the structures through which this systemic movement towards Riba replication occurs I personally know scholars who are troubled by this. Who refuse to operate with Islamic banks. Who are trying their best to support change. Who see the ideological capture taking place and wish to reverse it. This is why my base position has been that reform of such a captured modern Islamic banking system is not possible. Because it is operating exactly as planned. What is needed is not better products built inside the same system. What is needed is a direct abandonment of Islamic banking and the opportunity for Shariah and scholars to operate without constraint in the search for faithful financial markets and products. It is my unyielding respect for Shariah and scholars that is the driver of my criticism.

“But stablecoins are nothing to do with Riba! “ There’s a difference between Muslims being on the back foot and operating as best we can - with considerable constraint - within a financial system not made for us. The point being we can try to build a base that may survive if and when we can operate without Riba And Leaving the fiat space (or claiming to do so) to ACTIVELY seek yield Utilising specific aspects that ENTIRELY depend on Riba to exist and survive and could not exist without Riba, and then using a direct consequence of that to profit from and extract yield from. ( specific reference here to USDC and USDT but the wider claim applies) If riba is eliminated - these spaces would directly fail and not exist. And any business built on them would also not exist. When we make excuses to rebuild and rely on the explicit aspects of Riba we are ordered to avoid - this is not escape. This is not innovation. This is not saving Muslims This is not replicating the glory of our noble predecessors This is not preparing our Ummah for elevation This is not serving our Ummah This is extraction from Muslims. Pure and simple. We treat Muslims like Riba treats us. As items to monetise We treat our Deen as a tool for yield. A tool for emotional manipulation. A tool to uplift ourselves - and make us sound like saviours. Our Deen presses upon us a coherent philosophy of capital and constraint. We choose to ignore it. There can be no benefit for us here.

Withholding capital is a legitimate decision based on Amanah and a wholly Islamic aligned philosophy of capital. Let your money do nothing if you see no opportunity where you can defend your right to this yield in front of Allah swt. How would I approach this transaction? I wouldn’t (speaking for myself). I leave the domain of Riba and non-enterprise yield to non Muslims.