Shariah-compliant crypto eyes $4tn Islamic finance opportunity

By Gloria Methri

As Islamic finance experiences record-breaking global growth, a new report by INPUT reveals that Sharia-compliant cryptocurrency is emerging as a promising yet complex frontier within the financial sector.

According to the report, the global Islamic finance market, currently valued at $8 billion, is projected to soar to $12.45 billion by 2028, driven by a compound annual growth rate (CAGR) of 11.7%. In parallel, a cohort of emerging crypto players are tapping into this expanding demand by offering faith-aligned, interest-free digital finance solutions to the world’s two billion Muslims.

Leading Projects to Build Faith-Centric Crypto Ecosystems

Several key players have surfaced in this niche space, each building unique platforms that comply with Shariah principles—eschewing riba (interest), gharar (excessive uncertainty), and industries considered haram.

• The HAQQ Network stands out as the largest and most advanced Sharia-compliant crypto project. Backed by $400 million in funding and 6.12 million users, HAQQ has developed an entire ecosystem, including the HAQQ Wallet, HAQQex, Deenar Gold, and BarakFi. The platform’s Ethereum-compatible blockchain supports Islamic Coin (ISLM), which donates 10% of all new tokens to charity via the Evergreen DAO. With over 34.5 million transactions processed, HAQQ is setting benchmarks in ethical crypto innovation.

• Goldsand (formerly Inshallah Finance) focuses on halal staking across Ethereum and Solana networks. It has amassed $4.5 million in staked digital assets, offering an interest-free alternative to conventional DeFi staking products.

• MRHB Network, with 95,000 users reported as of September 2023, offers four Sharia-compliant products, including M.I.R.O, MPower, TijarX, and EmplifAI. It aims to make decentralised finance accessible and ethical.

• Sidra Chain is another notable name, having facilitated 12.9 million transactions for its 737,000 global Muslim users. The project delivers compliant crypto solutions tailored to the evolving expectations of faith-conscious consumers.

• Caiz, the only project yet to launch, is also working towards developing a compliant ecosystem, signalling growing interest and competition in this market.

Gen Z Drives Faith-FinTech Adoption

Interest in Islamic digital finance is accelerating, fuelled by a growing tech-savvy Muslim youth, particularly Gen Z. According to Fintech Magazine, 85% of Gen Z Muslims are already engaging with Islamic banking services, creating fertile ground for the expansion of crypto platforms rooted in religious values.

Geographically, while the Middle East remains a stronghold, Southeast Asia and parts of Europe are increasingly participating in the rise of Sharia-compliant decentralised finance, the report found.

Navigating Challenges: Regulation, Governance, and Trust

Despite the sector’s promise, companies face hurdles ranging from theological complexities to regulatory ambiguity. Experts argue that for Sharia-compliant crypto to flourish, it must be underpinned by robust regulation, standardised Shariah governance, and deeper integration with global crypto networks.

With the broader Islamic finance sector forecasted to approach $4 trillion in the coming years, the potential for ethical, compliant crypto to scale is immense—especially as demand for values-based digital financial products continues to rise.