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Unlocking the potential of 'waqf' with blockchain
As a fintech breakthrough, blockchain also shares some important features of fintech products including transparency and ease of use, which are equally important to the principles of Islamic finance.
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A blockchain is essentially a distributed database of records or a public ledger of all transactions or digital events that have been executed and shared among participating parties. (Shutterstock/File)
Islamic social finance, as a fundamental aspect of Islamic finance and economies, increases in popularity by the day.
This sector is comprised of several instruments including waqf or its pluralawqaf. According to prominent Islamic economist Monzer Kahf, waqf, or Islamic endowment, entails the possession of certain property and its preservation for the sole purpose of philanthropy by prohibiting its use for any reason outside that specific objective.
It has wide economic implications and can play an important role in increasing social welfare. Whereas the corpus of this endowment is usually immovable assets such as land and real estate, moveable assets such as cash, books and seeds. are also included. In addition to providing support for religious matters, which was its original purpose, waqf can be established for the provision of economic relief to the poor and needy, and to provide social services such as education, health care, public utilities, research, service animals and environmental/natural resource protection.
An important characteristic of waqf relates to its objective, that is, the idea of birr (doing charity out of goodness). Many scholars describe the ownership ofawqaf assets/properties “as if it were owned by God”. The donor, or waqif,determines the objectives for which the property made into waqf can be used and the way its fruits, services and revenues are distributed.
