HAQQ Shariah-Compliant Blockchain: Promoting Financial Inclusion in India
HAQQ, an ethics-first L1 blockchain that aims to create an ethical and Shariah-compliant financial ecosystem and promote universal financial inclusion.
New Delhi (India), August 11: With more than 2,100 fintech in operation, 8.5% expansion annually, a stunning 150% compound growth in the mobile wallets industry, a long-awaited cryptocurrency regulation bill, and the pilot launch of the digital rupee, India’s finance sector is experiencing a full-scale digital transformation, praised by the government and entrepreneurs. The process rapidly bears fruit: according to the official Census, the country’s banked population has more than doubled since 2011, bringing bank accounts to the homes of 87-97% of India’s households.
Yet these optimistic numbers overlook a gaping disparity: 210 million Indian Muslims remain unbanked or don’t use their bank accounts for savings and loans, even in affluent urbanized states like Kerala. While the government is actively promoting the proliferation of basic financial services, it fails to consider financial deepening, especially with regards to religious communities. What are the causes of the financial exclusion of Indian Muslims, and how do we reconcile technological progress with awareness of religious minorities’ special needs?
Shariah Law as a Barrier to Conventional Finance
The faith-based exclusion of Muslims is rooted in the tenets of Shariah law. Shariah prohibits ribā and gharar: charging interest, speculating on ambiguity, and transferring risk. Therefore, the very basis of conventional financial systems is considered haram — an unethical activity that breaks religious guidance. This prevents traditional Muslim communities from investing in common financial instruments — even from holding money in deposit accounts.
Instead, they resort to Islamic finance, an interest-free parallel financial system built on the principles of risk and profit sharing. Although the Reserve Bank of India’s advances in Islamic finance are limited, private cooperation shows that, when presented with a Shariah-compliant alternative, Indian Muslims willingly adopt it. For instance, the Sanghamam Multi-State Cooperative Credit Society’s deposits increased by 17 times from 2014 to 2019, while the growth in loans over the same time period was 11-fold. Still, such institutions are largely limited geographically and in size, unable to sustain a large community and support international transactions.
Fortunately, technological development brought a solution. Meet HAQQ, an ethics-first L1 blockchain that aims to create an ethical and Shariah-compliant financial ecosystem and promote universal financial inclusion.
Exploring HAQQ
HAQQ is an application-specific blockchain built on the Cosmos SDK. At the heart of HAQQ lies the Tendermint Core Consensus Mechanism, one of the industry’s fastest Proof-of-Stake transaction finalization algorithms. Tendermint Core boasts industry-leading security, proven by the trust of industry leaders like Binance and Polygon.
The high throughput of the HAQQ blockchain is also supported by Cosmos’s native advantages, like easy scalability, low transaction costs, and operational streamlining, making HAQQ convenient for developers and clients.
Achieving Seamless Interoperability
HAQQ is compatible with the EVM-native software, meaning that developers can seamlessly deploy Ethereum-based protocols, dApps, and smart contracts or communicate with infrastructures like Metamask and Ethereum. This pairing allows users to benefit from the existing software while remaining committed to Shariah.
The Cosmos SDK also offers an inter-blockchain communication protocol (IBC). The IBC protocol allows HAQQ and its native Islamic Coin token to establish trustless cross-chain communication with other ecosystem participants, decreasing exposure to vulnerable bridges.
Shariah Oracle, Enabling Easy Compliance
The launch of the Shariah Oracle, currently scheduled for Q3 2023, will create a powerful tool for secure blockchain interaction. Shariah Oracle will keep a whitelist of smart contracts native to HAQQ or imported from Ethereum and rank them according to different levels of approval based on technical security and religious compliance. The Oracle will alert users if a contract fails to satisfy the preferred criteria, decreasing the possibility of fraud or Haram transactions.
For a contract to be whitelisted on HAQQ, it must win a HAQQ community approval vote. If a developer wants a digital alternative to a halal certificate, the case may be given to HAQQ’s Shariah board for a small fee. The Oracle should provide easy access to digital finance for many devout Muslims.
Haqq: Where Technology Meets Ethics
Today’s digital finance transformation will yield financial inclusion, greater transparency, and user convenience. HAQQ and Islamic Coin are among the first to address the needs of digital Islamic finance, and the world has already taken note.
Building an ethics-first and socially conscious blockchain takes the best from tradition and technology. HAQQ is changing how finance is perceived while paving the way for more awareness and equitable financial inclusion.
For more information, please visit: https://islamiccoin.net/
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