1) Remittance refers to money sent by migrants and expatriates to friends and family in other countries. Current remittance models face challenges of high fees, unfavorable exchange rates, and slow processing times. 2) Blockchain and cryptocurrency technologies could help address these challenges by enabling faster, cheaper, and more secure cross-border money transfers through platforms like Rebittance. 3) While cryptocurrencies raise issues around uncertainty and speculation from an Islamic finance perspective, blockchain transactions could comply with Shariah principles by eliminating uncertainty and establishing transparency. Rebittance and other platforms aim to develop remittance solutions that are permissible and efficient for Islamic markets.

1. Gharar Free ReBittance– Powered by Blockchain
By Lokesh Gupta
CTO/Co-Founder
RM Applications Sdn Bhd
Workshop 8 : Fintech, Digital Currency and the Future of Islamic Finance in
the GCC- Strategy, Operational and Regulatory Issues
The Gulf Research Meeting 2018
University of Cambridge: July 31 - August 3, 2018

2. What is Remittance ?
2
▪ Emerging market
▪ Family Living at home
with other family
members
Sender Receiver
▪ Migrants in Developing /
Developed Countries
▪ Away from home and
family
Needs
◼ Trust
◼ Convenience
◼ Minimal paperwork
◼ Low cost
◼ Confirmation payment has reached
◼ Customer service on Remittance Status
Needs
◼ Quick funds availability
◼ Convenience on receiving
◼ No hassles or less paperwork
◼ No fees
◼ Customer service on funds arrival and access
Market Players : Banks + Remittance House + Post Offfice Etc.
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3. Remittance is Beyond Migrant Workers
Embassy
Staff
Migrant
Worker
Resident
Expatriate
Knowledge
Workers
P2P
Shipping Crew
/ Others
B2B
B2B : Payment from SME / Corporate to their Suppliers
B2I: Payment from SME / Corporate to their Employees Based
Overseas
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4. Remittance Industry Outlook
Remittance to Low and
Middle Income Country
has increased in 2017
by 8.5 percent, rising to
$466 Billion
Remittance flows in the
Middle East and North
Africa is 53 Billion and
Growth Rate is
9.3%
In 2018 Remittance
flows to LMICs growing
an estimated 4.1
percent to reach
$485 Billion
The top
remittance
receiving
countries $
Value were
India, China followed
by Philippines Etc.
The worldwide number
of international migrants
(including refugees) in
2017 rose to
258 Million
It is estimated that
remittance to GCC
region will grow by
2.9 percent to
$53 billion
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Source : World bank 2018

5. Evolution of Remittance Models
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- Leverage on Society
for Worldwide
Interbank Financial
Telecommunication
(SWIFT) for Sending &
Receiving Money
- Most Popular
amongst Financial
Institutions
- Practiced for
Individual & Corporate
Transactions
- Money Transfer
Operators (MTO) such
as Western Union,
MoneyGram, Ria etc
- Leverage on
worldwide network of
agents, ATMs and
electronic channels to
credit or disburse the
funds
- Most Popular for P2P
remittances and
largely Cash driven
- Online Remittance
Service Providers
- Mobile Money
(Wallet) driven
Remittance Models
- Cashless Remittance
Models
- Leverage on MTO
Network for
Remittance Processing
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6. Remittance Process – Commonly Practiced
6
Sender Sending
Agent
MTO
(Sending
Country)
MTO
(Receiving
Country)
Disbursing
Agent
Receiver
Statutory Compliance / AMLA Compliance / Regulated Process & Control
Cash Pick Up Direct Credit Mobile Money
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7. Challenges of Current Remittance Models
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Low
Transaction
Fees
Better
Exchange
Rate
Speedy
Processing
Sender
Expectations
Correspondent
Banking Driven
Remittance
MTO Driven
Remittance
Digital
Remittance
Varies - often ranges from
US$10-US$35 + Possible
Landing Charges
Higher Mark Ups on
Exchange Rate
Average 2 to 3 Working Days
and will differ based on
Sender & Beneficiary Bank
Varies - often ranges from
US$ 1 and above esp. in
South Asia
Moderate Mark Ups
on Exchange Rate
Average 1 to 2 Working Days
and differs based on Service
Providers
Varies - often ranges from
US$ 1 and cheaper further
using Mobile Money
Moderate Mark Ups
on Exchange Rate
Average 1 to 2 Working Days
and differs based on Service
Providers
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8. Challenges of Current Remittance Models
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High Remittance Cost : The global average
cost of sending remittances of $200 (inclusive
of all fees and charges) remained at 7.1 percent
in 2018 Q1.
▪ SAR had the lowest costs, at 5.2 percent.
▪ The Target set under Sustainable
Development Goal (SDG) is 3 percent
Contributing Factors
▪ Dependency on
Intermediaries (Require
Account in Corridors)
▪ Brick & Mortar Based
Remittances
▪ Multiple Layers of Agents
▪ Lack of Awareness amongst
Senders on Charges
▪ Cash and bank accounts
Cost 7%,However average
cost of using mobile money
is 4.2%.
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Source : World bank 2018

9. Technology Driven ReBittance
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▪ Technology Driven Remittance Model whereby Leveraging on Crypto Currency & Blockchain
for Remittance Model
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10. Technology Driven ReBittance Platforms
10
The Hong-Kong based
company offers an end to
end blockchain powered
remittance services
The Philippines-based
bitcoin exchange
offers a bitcoin
wallet and even works
as a mobile remittance
service
Rebit offers
international money
transfers, bills payments,
and eload to the
Philippines via Bitcoin,
with zero processing fees
BitPesa provides
a simple way to
send and collect
payments to and
from Africa using
BitCoin
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11. Secured / Irreversible
Real Time Transactions
How Rebittance can Address the Current Remittance Challenges?
11
P2P Transaction
Cheaper Transaction
Processing
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12. Cryptocurrency & Blockchain in Islamic Finance
▪ There is a debate ongoing on whether Crypto Currency is Permissible (Halal)
due to presence of principle of gharar (uncertainty) and is based on reasoning that
the value of bitcoin is speculative (Qimar),
▪ Saudi Arabia has shown more positive attitude to crypto-assets and Dubai has
become one of the most active hubs of crypto-asset technologies
▪ Observation were made by Martin and Blossom’s internal Shariah advisor and
Shariah compliance officer, Mufti Muhammad Abu Bakar, published a study that
concludes bitcoin does qualify as Islamic money, unless a local government
forbids the use of digital currencies
▪ Bitcoin would qualify as a digital asset (Mal) which possesses value
(Taqawwum). From a purely fiqh and Islamic law perspective, investing in Bitcoin
and the return could be considered lawful (Faraz Adam, 2017)
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13. Gharah Free Rebittance Compliance with Shariah
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▪ Blockchain technology is in compliance with Shariah principles as it Is based on
computational and mathematical applications with no prohibited elements within
its content.
▪ Eliminate presence of Gharar from transactions since its verification process is
strong and transparent for all participants on the network and with a proper trail
▪ Cryptocurrency is being used for remittance along with blockchain then the
transaction is processed on real time basis and there is no element of
speculative (Qimar) in the transaction
▪ The entire transaction flow using blockchain promises transparency, trust and
efficiency in line with Shariah Principles
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14. Gharar Free Rebittance Platform
14
Digital Islamic Bank
with Blockchain
Technology. It also
offers Transfer,
Remittance &
Exchange
Cross-border money
transfer using Ripple
Blockchain Technology,
which marks the first time
the technology has been
used in Saudi Arabia.
California-based Stellar has
received certification from
Islamic scholars for its
blockchain platform and
related cryptocurrency to
offer shariah-compliant
financial products.
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15. Moving Ahead..
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▪ Blockchain and cryptocurrency bring many advantages and it can’t be
ignored.
▪ Digitalization of remittance clubbed with blockchain and cryptocurrency will
bring trust, transparency, savings and efficiency for customers
▪ In Line with Financial Inclusion Intitaives – Banking for All
▪ More in-depth research is required on permissibility of Crypto Currency
due to the principle of gharar
▪ Initiative by Regulatory Bodies in GCC such as Sandbox / FinTech Hive
Accelerator to encourage Innovation

16. Thank You
lokesh@rma.com.my
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