Qitmeer and Smart Islamic Banking
Islamic banking is a banking system that is based on the principles of Islamic or Sharia law which does not encourage interest ( non- interest banking ) and guided or governed by Islamic economics.
Two fundamental principles of Islamic banking are the Sharding of profit and loss, and the prohibition of the collection and payment of interest by lenders and investors. Islamic law prohibits collecting interest or “Riba.”
Islamic banking is grounded in Sharia, or Islamic, principles and all bank undertakings follow those Islamic morals. Islamic rules on transactions are called Fiqh al-Muamalat.
The origin of Islamic banking dates back to the beginning of Islam in the seventh century. The Prophet Muhammad’s first wife, Khadija, was a merchant.
He ( SAW ) acted as an agent for her business, using many of the same principles used in contemporary Islamic banking.
In the Middle Ages, trade and business activity in the Muslim world relied on Islamic banking principles. These banking principles spread throughout Spain, the Mediterranean, and the Baltic states, arguably providing some of the basis for western banking principles. From the 1960s to the 1970s, Islamic banking resurfaced in the modern world.
Typically, financial transactions within Islamic banking are a culturally distinct form of ethical investing. Currently , there are over 300 Islamic banks in over 51 countries, including the United States.
To earn money without the use of charging interest, Islamic banks use equity participation systems. Equity participation means if a bank loans money to a business, the business will pay back the loan without interest, but instead gives the bank a share in its profits. If the business defaults or does not earn a profit, then the bank also does not benefit.
The Islamic financial sector has experienced substantial developments in the new century and has grown very rapidly both in size and number of institution. With this requirement, Islamic banking has been continuously developing new Shariah compliant products that both alter their ability to compete with conventional banks and alter their risk taking and risk mitigation profile.
Qitmeer, the next generation public chain based on BlockDAG which is dedicated to serving the ecosystem of Islamic Finance, ethical finance, and socially responsible investment, aims to revive this sector through the introduction of smart banking by tokenizing the Islamic banking sector which will aid the technological advancements of the Islamic finance.
This technology’s aim is to change the normal conventional banking by making it easier and simpler for everyone to perform banking activities from anywhere regardless of their social status. Blockchain is a disruptive technology that will fundamentally change banking.