CoinMENA is a Sharia-compliant exchange, certified by the Bahrain-based Shariyah Review Bureau.
Qatar Central Bank (QCB) released a statement warning against dealing with any unlicensed financial institution or service provider, following CoinMENA’s launch in the Gulf state.
CoinMENA has become the first regional digital asset exchange to operate in Qatar, allowing Qatari citizens and residents to open accounts with the trading platform and access all its features as of 19th May.
One such feature includes an individual having the capacity to link their bank accounts to their personal CoinMENA wallets in order to facilitate streamlined deposits and withdrawals.
QCB stated that advertisements are spread from time to time on social media by unlicensed institutions to “promote their illegal activities”, and that there are no financial institution licensed to provide services of exchange, transfer, trading, or dealing with virtual assets and currencies.
The entity further warned that it will take legal action against any service provider and virtual assets in Qatar operating without a license.
Who are CoinMENA?
With its headquarters in Bahrain, the firm recently became the first onshore crypto exchange centre to introduce “limit trading,” allowing the platform’s users to set the price at which they wish to buy and sell crypto.
CoinMENA is a Sharia-compliant digital asset trading platform that is licensed and regulated by the Central Bank of Bahrain. Through the platform users can buy, sell, store and receive digital assets, such as Bitcoin.
It also enables deposit and withdrawal options according to the local currency.
Potential users can also earn bonus rewards upon inviting others through the platform’s referral programme.
Despite the warnings issued by Qatar Central Bank, CoinMena’s co-founders Dina Sam’an and Talal Tabbaa said: “We are delighted to become the first crypto exchange to offer our services in Qatar. Investors have been asking about our plans to enter the country for some time now, so this news represents a major milestone on our long-term geographic market expansion plans.”
“CoinMENA’s entry into Qatar is a huge step on our journey to becoming the Middle East and North Africa region’s preferred crypto financial services company,” Sam’an noted.
Crypto currency is considered a decentralised digital money designed to function as a medium of exchange through a computer network, which is not regulated by a government or bank.
Some Islamic rulings over cryptocurrencies
According to the Secretary-General of the International Union of Muslim Scholars Dr Ali Al Qaradaghi, an investment in crypto or digital currencies such as Bitcoin and its counterparts is forbidden by Sharia law due to several reasons.
In February, he argued that the means of money handling could potentially generate ‘riba‘, which refers to the exploitative gains made in trade or business.
Digital currencies, Dr Al Qaradaghi explained, are forbidden due to the inherent lack of value in digital money, which is otherwise found in elements such as gold and silver.
He states that as contrasted with credit or banknotes, digital currencies are not regulated by governments or a higher body, rendering it a forbidden make-up.
Commenting on the topic, Dr Abdulazeem Abozaid an Associate Professor of Islamic Finance in Hamad Bin Khalifa University and an expert on Islamic finance, told Doha News in February, that cryptocurrencies “do not qualify yet as valid currencies because they do not fulfil the Shariah conditions or requirements for a valid currency.”
“Nor are they valid to be traded or invested in. This is in view of the high risk associated with their trading due to their high volatility, which makes the whole process akin to gambling,” he said.
Whilst there is no common consensus in the Islamic finance industry regarding the permissibility of the digital currency, Devesh Vijay, Digital and Innovation Advisor, said: “Banks, fintechs and consumers have been riding the digital transformation wave for a few years.”
“However with the Covid-19 pandemic accelerating the digital agenda, it is no longer a choice to make. It is imperative for survival,” he added, as reported by KPMG in their Qatar Banking Perspectives 2021 paper.