The use of cryptocurrencies for hawala in the Islamic finance

  • Marco Valeri Università Niccolò Cusano
  • Rosario Fondacaro Università Niccolò Cusano
  • Cinzia De Angelis Università Niccolò Cusano
  • Andrea Barella International University College of Turin
Keywords: stable coins, Islamic finance, blockchain, hawala


This paper aims to evaluate where the application of new fintech solutions like blockchain and cryptocurrencies can be considered as an opportunity to build bridges between Islamic and western culture in order to create a trusted money transfer with low commission and a big transparency and trust.  The research question is: Can an Hawala systems based on DLT technologies be considered compliant both with anti-money laundry regulations and with Sharia values?  This is a conceptual paper relying upon an understanding of the literature in the fields of technology, sociology, anthropology, criminology and regulatory, as applied to the topic of Islamic practice known as Hawala and emerging new disruptive technologies like Distributed Ledger Technology.  The research has been conducted by a literature reviewing on Scopus data base by searching the following keywords: Islamic finance, cryptocurrencies, hawala, stablecoin, globalcoin, money laundering, blockchain.  The searching period was set on the last 10 years.  The paper discusses some scenarios to define new fintech Hawala system in an evolving scenario of cryptocurrencies, social network commitments and different type of blockchain where it can be digitally transformed by using new fintech technologies while became compliance with anti-money laundering regulations with the respect of Islamic values.  As practical implications, this paper could help to encourage researcher and entrepreneurs to evaluate and propose a digital transformation approach with the aim to maintain ancient tradition and, at the same time, apply new technology that improve the life of citizens.  As social implications this paper expands upon the understanding of how new fintech solution can be easily be integrated in the real life by using common devices like a mobile phone to be used as wallet for the daily expenses and to receive money from relatives from western countries.  The originality/value of this paper is that it covers the literature gap in the field of new fintech solutions applied to Islamic finance by providing a likely proposal by integrating popular tradition, regulations and new technologies.  The research limitations and implications are related to that this is a conceptual paper; case studies haven’t been treated, so it is not able to say definitively if the outcomes discussed can be defined as an effective solution and can be developed in the real global society, in a future prospective it’ll be possible to continue to make researches in this field of application with fintech technologies and Islamic Finance.


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How to Cite
Valeri, M., Fondacaro, R., De Angelis, C., & Barella, A. (2020). The use of cryptocurrencies for hawala in the Islamic finance. European Journal of Islamic Finance.