Malaysian Company Set to Launch Gold-Backed Halal Cryptocurrency

The Malaysian company HelloGold is preparing to launch a new gold-backed cryptocurrency called GOLDX. The new crypto is set to become available for purchase later this year, in Thailand. While the use of cryptocurrencies is becoming hotly debated among world governments, it appears there is also a religions angle. Islamic banking systems are under strict requirements to confirm to Halal standards. Most notably, Islamic banking prohibits usury in all forms, including the collection of interest.

According to Islamic scholars in Malaysia, the new gold backed crypto is certified Halal, thus making it compatible with the existing rules regarding finance in Islamic societies. Beyond this cerfification which could open up new crypto markets in countries with Islamic regulations on finance and trading, GOLDX also represents a new generation of cryptocurrencies whose value is derived from known commodities.

Today marks the beginning of pre-sales of Venezuela’s state sanctioned cryptocurrency El Petro. As the name suggests, the Venezuelan cryptocurrency is backed by the country’s large oil reserves. Russia will shortly follow with the introduction of a Cryptorouble which is expected to be backed up by resources owned and cultivated by the Russian state. Likewise, Iran is considering launching its own oil and gas backed crypto in the near future.

Taken in aggregation it is becoming apparent that there are now three different models for cryptocurrencies that look set to dominate the marketplace.

1. State sanctioned cryptos 

From El Petro to the Cryptorouble and a possible Iranian crypto, many states, particularly those who take a naturally grim view of the US Dollar and western finance systems, have embraced block-chain technology as a means of creating their own state-backed cryptocurrency which will bring fresh international investment into the country, while creating market confidence in a legal tender issued by states whose reputation has been unduly soured in Europe and North America. While some countries as diverse as the US, Germany, France, India and South Korea are looking to regulate or even ban cryptocurrencies, for countries outside of the Dollar economy (through no choice of their own), a state backed crypto is becoming increasingly popular as a means of circumventing US Dollar based institutions while still cultivating multi-national investment.

2. Commodity backed private sector cryptos

GOLDX looks to offer cryptocurrency investors and enthusiasts a chance to embrace the ease and convenience of crypto investment and potentially crypto retail, without having to worry about the issue of convertibility. As gold remains a stable and universally accepted commodity, GOLDX could theoretically be converted to gold throughout the world.

With many governments clamping down on cryptos, a new currency backed up by a trusted commodity will not only insure consumer confidence, but it may prove more difficult for governments to ban or overly regulate what would amount to a crypto token that merely signifies ownership of a given amount of a hard commodity.

3. Mined cryptos 

Cryptocurrencies initially derived their value through a process called mining, where individuals throughout the world solve complex mathematical equations and are rewarded with cryptocurrencies. While such a model is an extreme example of a fiat currency, most major western cryptocurrencies, including Bitcoin continue to be mined rather than ‘minted’ by a central institution, let alone derive their value from being pegged to the price of a hard commodity like gold or oil.

While mined cryptos have taken the most heat from central government regulators, particularly in India, they remain the most widespread cryptos in an increasingly crowded crypto marketplace. Bitcoin remains the most widely traded mined crypto.

Conclusion 

Because the digital marketplace is largely international, it seems as though all three cryptocurrency models will be available simultaneously. As cryptocurrencies mature and the wider markets adjust to their presence, it remains to be seen which of the three varieties of crypto will prove to be the most popular. Perhaps even a hybrid basket model combining mined value, pegged value and state backed value will one day be available.

For the moment though, while some governments try and restrict the use and proliferation of cryptos, the market nevertheless continues to expand.

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