Bitcoin and Islamic Finance

Year 2015
Author Jan Bergstra
Publisher ViXra
Link View Research Paper

Bitcoin / Cryptocurrencies / Society

It is argued that a Bitcoin-style money-like informational commodity may constitute an effective instrument for the further development of Islamic Finance. The argument involves the following elements: (i) an application of circulation theory to Bitcoin with the objective to establish the implausibility of interest payment in connection with Bitcoin, (ii) viewing a Bitcoin-like system as a money-like exclusively informational commodity with the implication that such a system need not support debt, (iii) the idea that Islamic Finance imposes different requirements compared to conventional financial policies on a money concerning its use as a tool for achieving social and economic objectives, and (iv) identification of two aspects of mining, gambling and lack of trust, that may both be considered problematic from the perspective of compliance with the rules of Islamic Finance and a corresponding proposal to modify the architecture of mining in order to improve compliance with these rules.