Blockchain platform Stellar’s recent Shariah certification was an important, if small, step toward the Islamic world’s embrace of cryptocurrencies and blockchain technology. It’s unlikely, however, to lead to a quick opening of the market to the world’s 1.8 billion Muslims.

The Stellar platform and its cryptocurrency (XLM), the world’s sixth largest digital currency with a market capitalization of $5.62 billion, according to CoinMarketCap, were deemed “halal” last week by Islamic scholars on the Shariyah Review Bureau, an advisory agency licensed by the Central Bank of Bahrain. Important to Stellars certification was its model and mission. For other major cryptocurrencies including bitcoin (BTC), however, debate continues, even after one leading Islamic scholar deemed bitcoin permissible this past spring.

Startups have emerged that are issuing cryptocurrencies backed by physical assets in an effort to get more Muslims on board.

“In order to become a Shariah-compliant money, blockchain and cryptocurrencies should be something tangible, recognizable that creates value, nonspeculative, and they should have pure economic value,” M. Kabir Hassan, professor of finance at the University of New Orleans, tells ThirtyK. “At present, these aspects are missing, says Hassan, who is also a former World Bank, International Monetary Fund and Islamic Development Bank consultant.

Currently, scholars, financial companies and academic institutions disagree about whether cryptocurrencies are a form of wealth and “real” currencies. Widespread adoption isn’t likely, Hassan says, until higher authorities, such as the International Islamic Fiqh Academy, make their views known. Technology also has to be transparent, he says, and not in the hands of a few.

Backed by Gold

Key to Stellar’s certification is how it verifies transactions. Rather than with mining, a transaction is verified when “trusted nodes” including financials, companies, nonprofits or even individuals reach a consensus on that transaction. Stellar’s mission is also important: to ensure financial inclusion and access.

That’s crucial in Islamic finance, which considers social and economic objectives more important than profit and prohibits money from being used a tool for earning interest. Bitcoin mining, in which computers compete against one another to solve complicated mathematical problems, has been compared to gambling, which is not permitted in Islam.

Other religions have grappled with these issues as well. In the Orthodox Jewish community, many believe it’s against their religion to borrow or lend money with interest. What’s more, some leading rabbis see bitcoin as more of a commodity than a currency, which becomes a problem when the amount borrowed fails to equal to the amount returned.

For now, in the Islamic world, startups have emerged that are issuing cryptocurrencies backed by physical assets in an effort to get more Muslims on board. OneGram, based in the United Arab Emirates, is issuing gold-backed cryptocurrency; each OneGram cryptocurrency is backed by a gram of physical gold stored in a vault.

Last year a Russian entrepreneur launched BitCoen, a “kosher” cryptocurrency that conforms to Jewish law and offers interest-free loans. It promises to set aside 10 percent of earnings for charity and can be used at certain kosher restaurants and stores.

Cooperative Currencies

Hassan’s vision of the future includes bitcoin-inspired currencies that assist governments in achieving their monetary and fiscal goals. “Virtual currencies are here to stay, but not necessarily in the bitcoin form, he says.

Perhaps those currencies will look something like BitCoen, and like a soon-to-be launched cryptocurrency for vegans called VeganNation. With VeganNation, Israeli-based founder Isaac Thomas and his partners have built a currency for a like-minded community with similar beliefs and behaviors. Community members will be able to track a vegan product throughout its lifetime through the VeganNation blockchain.

It’s a model that could be replicated in religious communities, he tells ThirtyK. In theory, designers could program a currency to not carry interest or not allow transactions on the Sabbath, Thomas says.

“I see us moving toward a world where groups of people based on their need will develop their own cryptocurrencies,” he says. “Some will continue to talk to other currencies, and others will become something of their own.”

Deborah Lynn Blumberg is a Houston-based freelance writer specializing in business, finance and health and wellness. Her work has appeared in publications including The Wall Street Journal, Barron’s, MarketWatch, The Christian Science Monitor and Newsday. Previously, she was a reporter at Dow Jones/The Wall Street Journal.