New research that included top experts in Islamic finance reveals significant interest in the Metaverse as well as growing acceptance of cryptocurrencies and digital assets in the Middle East.
The research was carried out by IslamicMarkets.com, a website that offers access to financial opportunities and specialist knowledge, in support of the Global Islamic Finance Forum 2022 (GIFF2022).
The event, with the theme ‘Take the Reins’, is organised by the Association of Islamic Banking and Financial Institutions Malaysia (AIBIM), in collaboration with Bank Negara Malaysia (the Central Bank of Malaysia), and aims to develop a lively discussion about the work necessary to strengthen Islamic finance’s position as the global leader.
According to the report, 63% of experts in Islamic finance believe that over the next five years, the degree of acceptance of cryptocurrencies and other digital assets in Islamic financing would rise, with 16% anticipating a considerable rise. With 20% predicting a sharp increase in the next evolution of the digital customer experience in Islamic finance, that number jumps to 70% who predict that adoption of the Metaverse in the Islamic finance industry will expand over the next three years.
According to the research, significant regulatory changes have persuaded professionals to take a closer look at crypto and digital assets. But, many in the Islamic banking sector have been skeptical about these products.
Skepticism is also being dispelled by the reality that countries like Saudi Arabia and the UAE will increasingly play big roles in the cryptocurrency and digital asset industries.
The study also discovered that the appeal of components of cryptocurrencies, such as no interest payments in Bitcoin, was a factor in the acceptance of cryptocurrencies and digital assets in Islamic banking.
Improvements in custodial services in the digital and crypto sectors have also persuaded some skeptics in addition to growing adoption by more mainstream institutional investors.
GIFF2022 Chairman Arsalaan Ahmed said, “Many in the Islamic finance sector have steered clear of cryptocurrencies which, given the recent volatility, has proved a wise move but that may be about to change with growing interest in digital assets and the Metaverse. The role of countries such as the UAE and Saudi Arabia in the crypto and digital asset sector highlights the interest in cryptocurrencies in the Muslim world.”