HAQQ Network Bridges Frontier Technology with the Ethical Principles of Islam

The tokenized real-world assets sector has surged over the last few years and is expected to grow to a staggering $16 trillion market by 2030. To guide us in navigating through this market, Alex Malkov, co-founder of Islamic Coin, talks about this industry and the latest Islamic Coin updates in an interview with Coin Edition.

1. In 2023, the HAQQ Network and its native cryptocurrency, Islamic Coin (ISLM), emerged as the most prominent L1 blockchain bringing Islamic Finance to web3. Now it’s making a great comeback announcing the coming launch of its gold-backed token. Could you share how this token integrates with Islamic financial principles and what unique advantages it offers over traditional gold investments?

Currently, opportunities for traditional gold investment are lagging behind the rampant demand for the asset. As investors suffer from geopolitical turbulence, extreme market volatility, and strong inflationary pressures, they begin flying to safety. This has resulted in new all-time highs for the price of gold this year. Moreover, gold-linked ETFs come at the cost of superfluous management expense ratios or inclusion into coveted financial markets. Our token provides investors with the ease of one-click trading, global availability, and financial inclusion at no additional cost to the customer.

There is an ongoing debate among the scholars of Islamic Law about whether crypto tokens fall under the second category. In the case of Islamic Coin, we got Fatwa from well-known Muslim scholars to ensure our project is Shariah-compliant and provides real tangible value to the community. Empowering traditional Muslims financially and supporting community development by funding ethical-focused projects on our chain suffices to prove that ISLM is more than just a speculative instrument.

It is even easier to ensure Shariah compliance in the case of our new gold-backed token. As it could be exchanged on-demand for a real-world tangible asset, it bears no speculation on ambiguity, and pays no direct interest, which makes it perfectly aligned with the core Islamic financial principles.

2. The launch of your gold-backed token indicates your shift toward tokenizing real-world assets. Can you share your vision for this market and outline the steps you’re planning to take?

The tokenization of real-world assets has long been a hot topic in the blockchain and finance communities, and we at HAQQ share this excitement. Taking an instrument with an established market fit to the next level of convenience is the low-hanging fruit in terms of adding value to the ecosystem. I believe that we are yet to see the RWA market expansion in 2024, and this growth will be driven by tokenized bonds. Just over the last year, for instance, the capital allocation to on-chain Treasuries skyrocketed ten-fold.

We recognize the stable trend and seek to contribute to its broader adoption, as well as to provide traditional Muslims more opportunities to benefit from Web3. Currently, HAQQ Network is actively exploring the technical aspects of taking Halal Islamic bonds — Sukuk — on-chain. More accessible, convenient, and ethical capital markets will benefit investors and borrowers alike.

3. The past year has been tough for the entire crypto industry, including Islamic Coin. Could you discuss how you’ve managed these challenges and the key takeaways for your team?

The official launch of Islamic Coin in October 2023 was unfortunately overshadowed by the start of the VARA investigation. Despite the HAQQ’s stellar transparency and compliance protocols, the regulatory authority believed further clarifications were necessary. Our commitment to open communication and cooperation eventually resulted in an investigation ending with no enforcement from the VARA’s side.

Nevertheless, the VARA incident stirred negative media discourse around ISLM, and some exchanges revoked their commitment to support Islamic Coin on the basis of unjustified risk — just days before the listing date.

Yet, we continued to hold to our key principles — regulatory integrity, product quality, and dedication. Islamic Coin was successfully listed on several centralized and decentralized crypto exchanges. Our community remains our greatest strength and support, and we feel privileged to live up to your trust.

4. After navigating all these challenges, you are now planning to expand your product ecosystem. Could you provide more details about your future plans for this expansion?

Our ecosystem expansion targets two key priorities: to improve the users’ convenience and broaden the scope of investment opportunities on the HAQQ Network. Firstly, we aim to lower the barrier to entry and improve UX by introducing our official Telegram bot and altering the HAQQ Wallet’s functionality. HAQQ Wallet is a non-custodial crypto wallet with Halal-complying yield opportunities across the range of supported assets. As I’ve already mentioned, we are also actively working on the gold-backed token, the tokenization of Sukuk (Islamic bonds), and further exploration of the opportunities in the market for RWA tokenization. Finally, we also seek to improve financial inclusion among the traditional Muslim communities. To advance this cause, we are launching a peer-to-peer loan marketplace and distributing prepaid ISLM-denominated Visa cards, launched in partnership with Brighty.

5. As the Islamic coin continues to grow, reaching out to and educating diverse communities is critical. What initiatives are you launching to deepen engagement and enhance understanding of your platform in modern crypto key markets like Nigeria, Indonesia, Turkey, and Malaysia?

We believe that our ecosystem’s greatest value lies within its vibrant community base. It is important to share our vision, educate our supporters, and empower new users from new geographies. The next phase is centered around diverse community engagement initiatives — primarily local meetups, developing our HAQQ Academy, and robust educational content from local influencers and key opinion leaders.

6. The final question is about your future vision. With significant advancements in product development and ecosystem growth, what is the long-term vision for Islamic Coin, and how do you envision it shaping the future of Islamic finance and the broader crypto industry?

We remain devoted to the mission of advancing a more inclusive, ethical, and equitable financial ecosystem. HAQQ Network is a prime example of combining frontier technology and the ethical principles of Islamic finance. I hope we set an example for the broader industry. The initial ethos of crypto lay in empowering the broader community — let’s not forget our roots.