How DeFi Taps into Large Halal Market with Nimbus
London – UK – 30 August 2021 / When it comes to cryptocurrencies, almost everyone wants to get in on the exciting gains that have seemingly happened since the inception of Bitcoin in 2008. However, some people may be limited to their exposure to crypto products such as DeFi, because of their religious beliefs.
DeFi is decentralized finance, and one of its many wonderful use cases is offering those who lend out their money interest as a reward for sending money to lending pools, where borrowers can borrow the asset and must make interest payments on their loan.
Muslims, for example, are exempt from participating in the DeFi ecosystem, as interest payments are deemed unethical under sharia law. Sharia is an Islamic Law practice that is followed closely by devout Muslims. Sharia explicitly states in the Quran that interest payments on loans are prohibited and are a sin, as are investing in alcohol, gambling, and pork companies. It is viewed as an exploitative financial act, as your money is only going up because of someone else’s financial situation. If the world is to eventually switch to DeFi savings accounts through partnerships with banks, it is important to also include the 1.8 billion Muslims in this new system, many of whom are unbanked either because of their credit score or simply because they are women and are not allowed to open a bank account on their own, and they are in dire need of these services. As well, faith-conscious Muslims are always concerned with whether or not financial products or investments are Halal, and Nimbus is allowing them to participate in the greatest financial revolution through their solutions.
Because DeFi’s offers interest payments, Muslims have been completely out of the ecosystem, and the $2T Islamic Banking system has been largely untapped, until now, as Nimbus offers a similar solution that is made up of gains from the underlying asset. Because cryptocurrency has intrinsic value, its price can appreciate and instead of receiving interest, it instead goes back into the asset itself. Nimbus believes that fiat money is not Halal, as it has no intrinsic value, and therefore, Sharia-compliant funds denominated in fiat money are not Sharia-compliant. Because cryptocurrencies do have intrinsic value, this makes it Halal in the eyes of the Nimbus team. Instead of providing interest payments through staking, borrowing, and lending, Nimbus aims to replace those gains with underlying asset appreciation so that Muslims can capitalize on new financial trends.
The process of defining DeFi as halal is a country-by-country decision amongst Islamic nations. So the Nimbus team has to approach each country with their solution, where the nations will then audit the entire system to ensure that Nimbus’s project is a legitimate, Ethical DeFi solution. Nimbus is hopeful that countries will see the intrinsic value of cryptocurrencies and allow their solutions to be broadcasted towards the Muslim population, as they too want to participate in the great surge in technological advances. Muslims will now hopefully be able to participate in DeFi because of Nimbus’s ethical solutions.
Nimbus is a DAO-governed ecosystem of dApps that offers more than 15 financial services in Fintech. With 50,000 active users in more than 120 countries, the Nimbus platform is based on a protocol that runs on open-source proprietary developed code, which has been audited by third parties based on a three-layer audit process.
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