Last Updated on 03/09/2024 by Arun jain
Stablecoins are known for their unique “stable” feature that sets them apart from other types of digital assets that are highly volatile and easily swayed by market sentiment, but a new stablecoin is breaking even more barriers because it not only complies with Shariah, But it is also a token backed by “non-political” assets.
Denar (DEEN) recently went live on the HAQQ network, an EVM-equivalent blockchain based on Cosmos, and since then, it has been gaining attention in the cryptocurrency space.
A stable stablecoin
What can be more stable than gold? A “stable” is called a stablecoin DinarBacked by one gram of gold safely stored with trusted global custodian, Brinks. Stable tokens are issued by a trusted standard and registered in Switzerland, ensuring compliance and security. It is also built on the ERC-20 protocol and is compatible with HAQQ and Ethereum wallets.
DEEN tokens are redeemable for high-purity physical gold, and are 100% halal digital coins. A very notable feature of Dinar is that 1% of sales go to charity, paving the way for a more purposeful way of using crypto.
In a niche with International Business TimesMaruf Yusupov, co-founder of Dinar, talks about the journey towards launching the token, what makes it special and why it could be a better investment than physical gold.
A different path to $DEEN
Yusupov shared that in the journey to create Dinar, the goal was to develop a stablecoin that was “really different.” To achieve the said goal, the team prioritized determining which reserves should support the token to ensure its stability. Most stablecoins are pegged to fiat currencies, but the Dinar team chose a completely different path forward.
“Gold provides a tangible and reliable asset base, making the dinar a stable hedge against inflation and economic uncertainty,” he said. He notes how the value of major fiat currencies such as the US dollar and the euro have been largely affected by inflation over the past decade.
What is special about the dinar?
Dinar provides many benefits to its users – stability and purposeful transactions – but there are three top qualities that make it stand out in the stablecoin market.
First, digital coins are backed by gold, which Yusupov notes is a “non-political” asset. “It is not tied to the economic policies of any one country. It is a global asset that remains valuable regardless of the actions of individual governments,” he explained.
Yusupov’s comments are supported by data. Tether (USDT), the US dollar-backed stablecoin, has been on a rocky path over the past 24 hours, according to data from CoinGecko. The same can be said about USD Coin (USDC), another stablecoin pegged to the US dollar.
Another top distinguishing feature of DEEN is Sharia compliance. “Our stablecoin is potentially the only halal option in the industry. We have ensured that Dinar fully complies with Sharia law, avoids practices like usury (riba) and maintains ethical financial practices,” Yusupov said. The token has also been received Fatwa to reflect its Shariah compliance.
Finally, the dinar is a digital asset championing inclusion. It is important for the DEEN team to reach out to unbanked and underbanked populations, especially in Muslim-majority regions. “By leveraging the blockchain, this stablecoin offers secure, low-cost financial transactions, making it an accessible tool for those traditionally excluded from the financial system,” Yusupov said.
Removing complexities related to physical gold investment
In an age where people are looking for assets that give them the best returns from their investments, dinars offer an alternative to the hassle of physically handling gold.
For one, storing physical gold is very complicated and can be very expensive. DEEN, the first gold-backed token on the cosmos, eliminates or significantly reduces the costs that come with storing physical gold. “You’re basically investing in a digital version of gold, which is a more cost-effective option for investors who want to avoid the overhead associated with physical storage,” Yusupov said.
It is quite understandable that not everyone can afford to invest in large quantities of gold, but with DEEN’s fractional ownership offering, investors can buy as much or as little as they want.
Additionally, stablecoins can be easily integrated with digital financial platforms, allowing users to connect with DeFi applications, digital wallets and smart contracts. “You can do more than just hold gold – you can earn yields, lend and participate in decentralized finance markets, all of which benefit from gold’s stability,” Yusupov noted.
A stablecoin tailored to the global Muslim population
Yusupov believes the dinar will accelerate utility and use cases HAQQ Network. A gold-backed stablecoin is something that most traditional blockchain networks lack. Since HAQQ is also an amalgamation of Sharia-compliant philosophy and cutting-edge technology, DEEN will feel right at home, being a stablecoin suited to the two billion global Muslim population.
The group faces extremely difficult religious and ethical hurdles when onboarding into the Web3 and blockchain space. But DEEN is not exclusive to the Muslim population. It is also suitable for a wider audience in the traditional financial sector who value the security and stability that comes with gold. Yusupov sees the dinar as a potential tool to expand HAQQ’s appeal to a wider and more diverse audience.
The dinar can also help the HAQQ network move forward with its goal of increasing financial solutions aligned with Islamic principles. Since DEEN is a fully Shariah-compliant asset, it can potentially attract Muslim investors and financial institutions looking to explore halal investment options.
“The dinar’s stability and real-world backing make it particularly attractive to institutional investors. Organizations are often looking for low-volatility assets that still offer growth potential, and our stablecoin fits the bill perfectly. By making dinars available at HAQQ NetworkWe are opening the door for institutional players who are eager to diversify their portfolios with consistent and stable digital assets,” said Yusupov.
Towards a $1T market by 2030
As more people are interested in stablecoins due to the higher security they offer as opposed to other cryptocurrencies, Yusupov sees the multi-billion-dollar market turning into a $1 trillion market by 2030. The current global stablecoin market valuation is currently $168 billion. by USDT, but Yusupov believes it’s just the beginning.
He acknowledged that stablecoins are only at the “surface level” of adoption. However, he believes that these particular tokens will be largely integrated into mainstream finance as more consumers adopt the assets and demand increases significantly over the next decade.
He also envisioned greater regulatory clarity for stablecoin holders, which would reduce the risks associated with the assets. Naturally, assets with lower risks become more attractive to institutional investors and corporations.
In the future, Yusupov envisions the development of “more region-specific stablecoins designed to comply with local laws, potentially boosting local adoption and trust.”
Yusupov is not alone in seeing the stablecoin market boom. Earlier this year, blockchain enthusiast Sean Stein Smith said that 2024 would be “Breakout year” for stablecoins, noting that this particular crypto segment has a “clearer” business case compared to others.
Post EXCLUSIVE: Dinar Co-Founder Talks Gold-Backed Stablecoin’s Unique ‘Non-Political’ Feature appeared first International Business Times.