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BCE : Islamic Finance Decentralised

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BCE VOKL Hosted on the 18th July 2018.
We explored the convergence of Islamic Finance and Blockchains. In this presentation we addressed the challenges in the current financial architecture and proposed a new model that can be leverage Blockchains and current islamic financial instruments to acheive greater financial inclusion.

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BCE : Islamic Finance Decentralised

  1. 1. Islamic Finance Decentralised Rethinking Participatory Financial Architecture
  2. 2. ETHICAL VALUES BEYOND SPECULATION Collaboration Risk Sharing Circulation of Wealth Gratitude Trust Abundance Partnership Moderation Fairness “Money was intended to be used in exchange, but not to increase at interest.” 350 BCE Aristotle
  3. 3. Contract Farming Asset Backed Bonds Manufacturing / Bridging Leasing Contract Trading - Buy Low Sell High CURRENT STATE OF ISLAMIC FINANCE Murabahah Istisna’ Banking Contracts Salam IjaraSukuk Equity InvestmentMudarabah Islamic Financial Markets worth US$2 Trillion | Malaysian Markets account for US$70+ Billion
  4. 4. WHERE DO THE PROBLEMS LIE ? PEOPLE PROCESSES PRODUCTS Existing Financial Architecture
  5. 5. WAQF ZAKAT WELFARE INSTRUMENTS TO THE RESCUE ? A religious tax of 2.5% taken by the govt to be distributed only to the poor, the needy, the debt ridden, people in captivity, etc. For Absolute necessities; i.e. food, water, shelter, clothes, amnesty, disaster relief, etc A Religious Endowment made to either a religious, educational, family trust, a charitable cause - or for any other welfare purposes. Used for cause based trusts – Education for Refugees, Breast Cancer Research, affordable housing development, microfinance Irrevocability Perpetuity Inalienability Transparency
  6. 6. HOW CAN BLOCKCHAINS HELP ? DATA - Public networks with crypto-currency provide an Immutable tamper proof audit trail of data - Transparent automated accounting & reporting - Public chains allow for permissionless innovation VALUE - Some crypto-currencies are Shariah compliant - ERC20 standards provide a way to tokenize commodities - ERC721 standards provide a way to tokenize assets CONTRACTS - Rules and regulation can be inescapably baked into the smart contracts - removing need to trust people - Automating contractual obligations allows for real time processing - Radical reduction in cost
  7. 7. - In-between Central Bank and Population - Distributes Financial Services to the Population - Provides Liquidity - Medium of exchange of value - Incentive for work - Allows Commerce - Serves as the mechanism for distribution of Funds - Extracting Value from Savings and paying for services - Role of Regulator - Applies Monetary Policy for the ecosystem - Creates Money MONEY MAKES THE WORLD GO AROUND Bank Branches Fiat Currencies ATMsCentral Banks
  8. 8. Collectives - In-between Waqf and Population - Distributes Financial Services to the Population Asset backed Tokens - Provides Liquidity - Medium of exchange of value - Incentive for work - Allows Commerce Users - Serves as the mechanism for distribution of Funds - Extracting Value from Savings and paying for services NO NEED TO REINVENT THE WHEEL Waqf - Role of Regulator - Applies Monetary Policy for the ecosystem - Creates Money
  9. 9. A Waqf is a cause based Endowment or Trust. The notion of DA-Waqf is an organizational contract that runs autonomously, in a decentralized manner, whilst programming the characteristics of a traditional Waqf into the DAW. Irrevocability Perpetuity Inalienability Zakat can be used to service the needs of food and shelter for the bottom 10% Transparency Governance WAQF AS A CENTRAL BANK Waqf Education Waqf Feeding the Homeless Waqf Disaster Relief Waqf Medical Research Decentralised Autonomous Waqf (DAW)
  10. 10. - Using 1 company as a proxy to register virtual companies - Using 1 bankable entity to register Bank Accounts COLLECTIVES AS BANK BRANCHES Unbanked use collectives as a proxy - Social Inclusion and Social Incentive to work and perform - Can be a requirement to qualify for Financial Services, health and Education - Allows local exchange between members and between collectives Potential for Social Upliftment - You do NOT Qualify for a loan until you are part of a four or five team group Grameen Bank Model
  11. 11. TOKENIZED ASSETS AS CURRENCY Value comes in many forms - Enables value transfer - Medium of exchange - Used as an Incentive to perform tasks or purchase more assets Currency?
  12. 12. USERS AS ATMs - Wallets are used to store and purchase new digital assets - Functionality for the transfer of value between users - Inline added services such as air time, bill payments, etc Wallets - Users become ATMs - The more users that join the network the more liquidity is provided to all - The more liquidity there is, the more benefits there are Users - Hyperlocal exchange provides liquidity - Secondary markets allow for token exchange - Digital POS tools and virtual eCommerce stores Marketplace
  13. 13. THANK YOU FOR YOUR TIME LEARN MORE www.BCE.asia @HammamRJ

BCE VOKL Hosted on the 18th July 2018. We explored the convergence of Islamic Finance and Blockchains. In this presentation we addressed the challenges in the current financial architecture and proposed a new model that can be leverage Blockchains and current islamic financial instruments to acheive greater financial inclusion.

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