This Ramadan, Shackwell Lane Mosque also known as Masjid Ramadan in Dalston is thought to be the first mosque in the UK to take Cryptocurrencies, Bitcoin and Ethereum, from those who would like to donate their zakat or sadaqah. Zakat is one of the pillars of faith in Islam, which is a commandment to Muslims to give 2.5% of their wealth to charity.
The trio behind this new initiative is the mosque Chairman Erkin Guney, Zayd al Khair, an Islamic advisor at the mosque, and Gurmit Singh, founder of a blockchain business.
The mosque, which is a registered charity, is hoping to raise at least £10,000 from crypto-currency over Ramadan, which started last week. Erkin Guney, the chairman of the Board of Trustees at Masjid Ramadan, stated that this year’s Zakat is going towards three principal areas: carrying out essential repairs at the mosque, assisting poor Muslim families with funeral costs, and feeding and offering shelter to those in need in the local area.
“We are a small independent mosque, which does not receive funding from anywhere. We are constantly trying to serve the local community, both Muslims and non-Muslims alike, and all support is most welcome. Muslims can now give Zakat or Sadaqah [voluntary year-round donation for Muslims] as Bitcoins and Ethereum via our website.”
There’s been an ongoing debate around the permissibility of cryptocurrencies amongst Muslims with there being a difference of opinion amongst scholars. The mosque holds the position that at this moment in time for the purpose of zakat they will be allowing crypto donations.
Zayd Al Khair added
“Some Islamic scholars have spoken in favour of crypto-currency, stressing that similar concerns existed when people swapped from gold to fiat currency [paper money]. Others, such as the Mufti of Egypt, have spoken out against, fearing a lack of regulation and the anonymity of users makes crypto-currency an ‘open gate’ for criminal activity.”
We asked Nida Khan her thoughts, a computer scientist currently doing research on the applicability of blockchain and data analytics in finance. She stressed the importance of the cryptocurrency being converted straight away to ensure that the donation is not affected by the volatile valuations of Bitcoin.
“A mosque or a charity opening up to receiving zakat and sadaqah in the form of bitcoin or other cryptocurrencies will ultimately have to convert it into fiat before it can be used. The conversion into fiat currency will not be fixed as the price of cryptocurrency varies so how can one determine the exact amount of zakat given. The fluctuations are very high in the cryptocurrency market. If it is certain for the donor that the amount that he gives is the same as is received by the charity or mosque then it should be OK. ”
The mosque has stated that once received, the mosque will promptly liquidate the donation, the transaction takes about 30 minutes, after which the amount in Sterling will be deposited directly into the mosque’s bank account. Who knows, perhaps this time next year we’ll be paying for our hajj trips in cryptocurrencies.