A Turkish-owned mosque in London, United Kingdom is taking a surprisingly savvy approach to almsgiving. The mosque is set to be the first to accept cryptocurrencies for donations during Ramadan for Zakat and Sadaqah.
Zakat is the compulsory giving of a proportion of a person’s wealth to charity to achieve self-purification. Meanwhile, Sadaqah is voluntary charity.
Both are good candidates for cryptocurrencies according to Gurmit Singh, founder of tech firm Combo Innovations and the person responsible for spearheading the crypto system. Singh convinced mosque chairman Erkin Guney to accept cryptocurrencies by explaining that they are commonly used by Muslims and would be particularly suited for Zakat.
These are not the only advantages. "The technology can enable global penetration, reaching people that currently have limited access to traditional financing, yet have a smartphone. We believe the model will appeal to non-Muslims too.” Singh told CCN.
A concept already in the works
This charitable use of the technology is not an entirely new concept. Cryptocurrency donations for philanthropic causes have been discussed for a while now.
The reason is that it may actually be a good fit. According to the Charities Aid Foundation, the currencies can benefit charities by boosting transparency and trust, and facilitating to deliver aid money where it is needed most.
In February, Fidelity Charitable announced that it had received $69 million in cryptocurrency donations in 2017. This is all more impressive considering that represented a nearly ten-fold increase from the $7 million collected last year by the global charity.
Fidelity Charitable vice president Amy Pirozzolo told CoinDesk: "It is one of the fastest growing assets that we are seeing wanting to be contributed to charity. Many people who own bitcoin or other forms of cryptocurrency do want to be philanthropic."
In April, a new platform was launched with the aim of using cryptocurrencies and blockchain technologies to reinforce trust in charities. To increase transparency, the startup, called AidCoin, is using the currencies for fund transfers while deploying distributed ledgers to securely track transactions.
This transparency protects both donators and aid recipients. The end result could be that more people will donate knowing their money goes to noble purposes.
A noble cause
On his part, Guney plans to put the crypto money toward philanthropic activities.“The zakat will be used to feed the poor in our local community and help others in need. We will also put a portion aside to help with the urgent renovations needed at the mosque,” said Guney.
He hopes that his example can inspire mosques and Islamic charities around the world. ”If the cryptocurrency campaign is a success and we do receive donations. If it works, I’m sure many other mosques and Islamic charities, not just in Britain but worldwide, will start doing the same.”
The mosque's leaders, however, will have to be careful when collecting their donations. Legislations around cryptocurrencies are relatively new and can be tricky to navigate.