SYDNEY: A new venture aims to use blockchain technology to modernise the management and investments of Islamic charitable endowments, called waqf, that would tap into a vast but underutilised pool of assets across the Muslim world. The firm will hold a forum in Kuala Lumpur next month.
Singapore-based financial technology company Finterra has developed a crowdfunding platform that uses digital ledger technology, or blockchain, to create ”smart contracts” that would be tied to specific waqf projects, said Finterra founder and chief executive officer Hamid Rashid.
The firm hopes this can provide a more efficient way to raise money, manage and transfer ownership of waqf, which receive donations from Muslims to operate social projects, such as mosques, schools and welfare schemes.
“We are trying to change the financial terrain in its approach to crowdfunding and development of waqf,” said Rashid in a telephone interview.
Finterra’s plans reflects the interest that a number of fintech companies have in broadening their footprint to include core Islamic finance markets in the Middle East and South-East Asia.
The company started developing its blockchain platform in October, with pilot projects currently being studied from endowments in Singapore, Malaysia and Indonesia, said Rashid.
“By June we hope to have the product fully up and running and we can then start onboarding clients. We can then promote to global waqf boards and to regulators.”
The firm will host a forum in Kuala Lumpur, the capital of predominately Muslim Malaysia, next month to discuss the applications of blockchain for waqf, having attracted interest from waqf bodies in Brunei and India.
Islamic endowments are believed to hold large portfolios of real estate, commercial businesses and other assets, with an estimate of as much as US$1 trillion of assets held in waqf globally. — Reuters