New research* with leading Islamic finance professionals shows growing acceptance of crypto and digital assets and rising interest in the Metaverse.
The research was conducted by IslamicMarkets.com, a leading platform that provides access to expert knowledge and financial opportunities, to support the Global Islamic finance Forum 2022 (GIFF2022).
The event, themed as ‘Take the Reins’, is organised by the Association of Islamic Banking and Financial Institutions Malaysia (AIBIM), in partnership with Bank Negara Malaysia (the Central Bank of Malaysia) and aims to generate an active discourse on the work required to strengthen Islamic finance’s global leadership position.
The study found that nearly two out of three (63 per cent) of Islamic finance professionals predict the level of adoption of crypto and digital assets in Islamic finance will increase over the next five years with 16 per cent expecting a dramatic increase. That rises to 70 per cent who say adoption of the Metaverse in the Islamic finance sector will increase over the next three years, with 20 per cent forecasting a dramatic rise in the next evolution of the digital customer experience in Islamic finance.
Traditionally, many in the Islamic finance sector have been sceptical about crypto and digital assets, but the research found dramatic improvements in regulation have convinced professionals to look at them more closely. The fact that leading Muslim-majority countries such as the UAE and Saudi Arabia will increasingly become key players in the crypto and digital asset sector is also helping to overcome scepticism.
The study also found that a reason for adoption of crypto and digital assets in Islamic finance was that there are elements of cryptocurrencies such as not paying interest in the case of Bitcoin that appeal to conservative Muslims. Growing acceptance by more mainstream institutional investors has also convinced some sceptics as well as improvements in custodial services in the digital and crypto sector.
GIFF2022 Chairman and Chief Executive Officer of Al Rajhi Bank Malaysia, Arsalaan Ahmed said, “Many in the Islamic finance sector have steered clear of cryptocurrencies which, given the recent volatility, has proved a wise move but that may be about to change with growing interest in digital assets and the Metaverse. The role of countries such as the UAE and Saudi Arabia in the crypto and digital asset sector highlights the interest in cryptocurrencies in the Muslim world.”