FINTECH DISRUPTION IN FINANCIAL SERVICES II
~SADAQA, WAQF, BUSINESS FINANCE, START-UP FINANCE,
MONEY EXCHANGE, SMART CONTRACT~
DR. NIK HADIYAN NIK AZMAN
01 03 Sadaqa? What is that?
The Islamic Abu Hurairah (ra‘) POWERPOINT
ideology of a two- reported Allah’s
world framework messenger (Pbuh) TEMPLATE
of life as saying: “When a man dies his acts come to an end, except three
things, recurring charity, or knowledge (by which people
benefit), or pious offspring, who pray for him”
(Sahih Muslim)
leads to
participation in
social causes and
selfless behaviour in
charitable giving
(Shaikh et al., 2017).
02
Sadaqa
Ustaz Yaacob Yusra:
https://www.youtube.com/watch?v=nGQ0IaE83RA
WaqFintech
Charitable Endowment What is WaqFintech?
1 Waqf refers to charitable endowments in Islam, which
typically involve donating a plot of land, a building, or
other assets for religious or charitable purposes.
Financing
2 Waqf had played a vital role in financing
infrastructure, education, healthcare in Islamic
civilisation
3 Public Services
Waqf has been used to finance public services such as
the building of roads, bridges, schools, libraries and
hospitals
Broader Scope
4 The uses of waqf funds are not restricted to religious purposes
but also encompass a broader scope of benevolent
causes
WHY Waqfintech Donors are often Lack of
is needed? unaware of how transparency
their contributions
are utilized
01 02 03 04
Ineffective in Mismanagement
attracting more
donors
The question arises whether new innovations such as WAQF
Chain platform could provide the public with a ray of hope in
the revival of Waqf around the world?
1WAQFINTECH 50%
VS.
CROWDFUNDING
2WAQFINTECH 50%
VS.
BLOCKCHAIN
A type of WaqFintech@ Shariah-
fund-raising crowdfunding compliant
crowdfunding
activity platforms
Used to fund There are four Emphasis on
both for-profit main types of fair distribution
and non-profit crowdfunding
of benefits
projects
Direct model
Indirect Model
Distributed ledger 2 WaqfCoin@Blockchain
managed by a 4
Improve the process of peer-to-peer
waqf collection and network
management collectively
1 2 particular
applications
Has many applications of blockchain:
and it can be used for 1. smart contract
tracking, exchange, 2. cryptocurrency
agreements, and
payment
3
A smart contract is a computer WaqfCoin@Blockchain
protocol that executes the terms of a
contract, which can be made partially 04 CODE 06
or fully self-executing The terms and SECURITY
(Muneeza et al., 2018). conditions of a contract
Security
03 are written as code concerns since a
COMPUTER PROTOCOL blockchain-
based smart
01
contract is
DONATION visible to all
cryptocurrency users
represents an
05 MONITORING
alternative
form of Preventing fraudulent
donation fundraising
02
SMART CONTRACT
smart contract could make
the waqf collection
process more efficient and
transparent
Waqfcoin@Blockchain
• In 2019, Finterra launched a Waqf
Blockchain to improve the administrative
process of setting up, authorising and
authenticating endowed waqf properties
(Finterra, 2019).
• Participants can create project proposals
to develop or redevelop endowment
properties.
• Each waqf project has its own attached
digital token and this token will be placed
into a smart contract
EXAMPLE
OF CASE
Increasing numbers of charitable organisations accept
cryptocurrency donations: for example, The Water Project charity
provides access to clean water across sub-Saharan Africa and over
100 projects have been funded by cryptocurrency donation (Water
Project, 2019). Equally, Muslim Global Relief
(www.muslimglobalrelief.org) accepts cryptocurrency donations
for its humanitarian causes. In 2018, the Shacklewell Lane Mosque
in London raised approximately GBP 14,000 in cryptocurrency
donations (Emem, 2018). The examples of Muslim Global Relief
and London mosque indicate a new chapter of crypto-philanthropy
in Muslim world.
Waqf Coin Model
Entrepreneurs are TINY FinTech start-ups
designing new processes PPT introduce even newer
and building innovative
alternatives
solutions
Cutting-edge start-ups in
Emerge as the FinTech sector are
industry leaders already experiencing a
hype due to their
Alternative lending, disruptive technologies.
payment, personal finance,
wealth management, and Large-scale analysis
of 14.000 FinTech
cloud computing.
start-ups,
A BC START-UP
EVOLVE IN 3
01 02 03
WAYS
Money Exchange
• Malaysian start-up CurrenSeek is a location-based
currency exchange app that helps travellers compare
and locate the moneychangers with the best rates.
• The company CLAIMS that travellers can save up to
200% of their travel money using the service.
Compare these rates,
sort the providers by
their rates or location
Apps will show you and distance
a list of exchange Sharing the latest
rates with fellow
providers nearby
travellers
Open the app, a HOW IT CurrenSeek is
map shows you the WORKS? solely available
various exchanges
on Android,
What is Smart contract?
• A smart contract is a disruptive
technology and gaining market
share at a rapid pace
• A smart contract is closer to
Islamic contract and in compliance
with Shariah objective to ensure
transparency in business dealings
or transactions
1 Programmability Key Features of Smart Contracts
Multi-signature 2
(or multisig)
3 Oracle inputs
Use Cases for Smart Contracts
• Smart contract technology could and will create
efficiencies and hence savings for every category of
monetary markets AND it will reorganize how
certain services are run within the economy. Some
financial service areas which could benefit from
immediate sizeable savings :
1. Capital Markets and Investment Banking
2. Commercial and Retail Banking
3. Takaful