Onegram Sharia White Paper

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The investigation of the validity of dealing with OGC and its compliance with Shari’ah rulings prompt us to address the following issues:

o Introduction o The nature and attributes of the OGC. o Maqasid al-Shari’ah framework as to the emergence of OneGram Cryptocurrency o The process of purchasing gold and its redeemability to OGC. o Governance aspects. o Sharia requirements.

1. Introduction This product consists of three sections and previously accustomed products. Notwithstanding that, altogether i.e., its current complex structure would lay a foundation to a new issue of which it requires a due consideration and diligent Shari’ah supervision. This system encompasses: 1. A new currency of a kind of cryptocurrencies. 2. Trading gold in a new, specific and particular procedure. 3. Fin-tech. This kind of (technologies) is considered to be one of the disruptive innovations and boosters of financial industry changes. The Shari’ah consideration pertains to all phases of this product of which it could be divided into three: 1. The stage of issuing the OGC by first purchasing and storing gold and then redeeming the customer's ownership to an electronic currency backed by gold.

2. Trading OGC through converting, selling and purchasing it along with its affiliated instruments such as the applications and prepaid debit card.

3. Investing in this currency. A fourth potential future consideration to be taken into account is:

4. Issuing (developing) products through this currency for special purposes.

2. The nature and attributes of the OGC

From Shari’ah point of view, this product could be considered as a currency for two major reasons: 1) It is backed by gold. 2) It is a reliable measure of value, medium of exchange and means of discharge. In this respect, Imam Malik said as reported in the “Mudawana (3/5)”: “and if people comes to agreement to use leather as a medium of exchange among them and mint it I would disapprove (disfavour) of selling it in exchange of gold and silver on deferred basis”. It is worth noting here that the primary presumption pursuant to which we are conducting this analysis is the compliance to Shari’ah. To pave the way towards a more stable, sustainable and just monetary system we have to think from a holistic perspective that overcomes the dominant paradigm regarding money and monetary system whose with the passage of time becomes a kind of topics that we cannot question and object to it. Therefore, a radical solution has to be laid down to create an atmosphere of prosperity.

3. Maqasid al-Shari’ah framework as to the emergence of OneGram Cryptocurrency

After the last global financial crisis, the question of sustainability, stability and prosperity of the current monetary system arises again. However, most of the discussions among politicians, economists, governments and academicians give impression as this is the first economic and financial crisis faced by humanity. Moreover, even when economists compare this crisis with the former crises they highlight only the differences among them whereas they never ever mention or try to understand what is the structural common causes to all these financial crises. Therefore, some prominent financial experts around the world have clearly identified what is the systemic cause to all these crises and suggest radical or structural solutions like crypto currency system which aim to open the door for more innovative payment systems and investment avenues mainly through redefining money or rethinking money. People at different social scales across the globe no longer have confidence on the ability of governments and great business leaders to resolve problems pertaining to the current monetary system which manifests itself through the recurrent economic and financial crises. International Monetary Fund (IMF) has identified since 1970 (1): -

145 banking crises.


208 monetary crashes.


72 sovereign debt crises.


This adds to an astounding total of 425 systemic crises: an average of more than ten (10) countries in crisis each and every year.


Adding to that 48 massive meltdowns between 1637 and 1929

Therefore, we are dealing with a systemic problem inherent in the current monetary system that never can be resolved with the traditional policies (fiscal policy and monetary policy). Consequently, we need radical solutions that start firstly with questioning the paradigm of money which some well known financial and economist experts wonder why decision makers never turn their attention to this conceptual point which they believe that it is at the

root of all these recurrent crises. That is why they are calling towards rethinking the current concept of money which in their opinion was invented in a very different era with a different view pertaining to the creation of wealth and another set of priorities and challenges than we have today [some of them shed light on the inconvenience of the current single currency system]. This can be clearly seen in the book of Bernard Lietaer "Rethinking money" where he says: “our current monetary system was designed some 300 years ago, during an era that knew nothing of natural limits and had a completely different set of objectives and priorities. It is tool that should be serving us rather than being our master. And since it is a man-made construct it can be re-thought, re-imagined, and redesigned"(2). These experts assert that the actual interest based fiat monetary system with its main features which are: fiat money, fractional reserve banking and interest rate lie at the bottom of the instability that distinguishes our contemporary juncture. In addition, they fiercely criticized the monopoly of money (the fact that we are using one single currency) and its creation process as well arguing that because we have a monoculture of money; in other words because we are using one type of money that is the valuable reason why the monetary system is unstable. Furthermore, they claim that there is scientific proof, peer review proof in five different articles that monetary monoculture causes the structural instability.1

The structural problem: To deeply understand the systemic problem of the dominant monetary system, some conceptual questions with respect to money and monetary system have to be asked so that we can frame our analysis. The first question that must be asked is: who create money and how is it created? The overwhelming majority of people across the globe believe that money is created by the government, but the truth is something else. Today, money takes the form of bank credit that must be borrowed into circulation. (5) This question and this fact prompt us to clarify the

process of money creation. To further illustrate this process and its effect on the economy we use the equation of exchange: M x V = P x Y where: M: is the money supply. V: is the velocity of circulation of money. P: is the general price level. Y: is the aggregate production in terms of goods and services. After the money being deposited in banks, the money supply increases through multiple deposit creation, therefore M increases, and if there were no corresponding rise in the real economy (goods and services) the general price level will tend to go up, consequently the inflation will take place in the economy. Moreover, this money created out of thin air enters the economy in the form of debt (that is why the nowadays money is well known as: conventional bank debt money) hence banks charge interest on it. This latter has many negative effects on the economy that can be grouped under these three headings (6): -

Interest requires endless economic growth even when actual standards of living remain constant.


Interest encourages competition among the participants in the economy rather than cooperation.


Interest concentrates wealth in the hands of minority by taxing the majority.

The striking deduction derived from demanding interest on this debt money is that total debt which is debt plus the interest is not repayable in aggregate due to the fact that the interest requirement needed to service the debt that does not exist in the form of money yet, i.e., the default in the current monetary system is by design. To illustrate, due to the lack of money in circulation in the system in aggregate, individuals and firms will suffer the shortage of money in the economy, and hence prompt them to compete stiffly to repay their debt. Some may succeed but others are sure to default. Moreover, the way in which the financial institutions deal with the default leads to worsen further the situation. In the case of default, banks choose either to reschedule the debt

which in turn leads to create more money through the same process or confiscating real wealth of the defaulters and thus transferring wealth to them. That is why they say that wealth tends to concentrate in the hands of a minority by taxing the majority. Therefore, the mere sustainability of the dominant monetary system requires more and more money to be created which gets into the economy as debt. Hence, to just keep the stability of the general price level there needs to be a continuous increase in the real output (Y), i.e., the stability of the standard of living necessitates endless economic growth. this reality is better summarized by Thomas Greco in his famous book “the end of money and the future of civilization” where he said “the way in which money is created by the banking system today causes a debt imperative ‫ ــــ‬this forces destructive competition for the available supply of money, which is never sufficient to enable all debtors to pay what they owe”. (7) The second question is: how is the monopoly enforced? In other words, how the national currencies are only being used as medium of exchange? As economics professor L. Randall Wray writes, ‘’in all modern economies the government defines money by choosing what it will accept in the payment of taxes. Once it has required that the citizens must pay taxes in the form of particular money (for example dollar), the citizens must obtain that money to pay taxes. In order to obtain that which is necessary to pay taxes, or money, they offer labor services or produced goods to the government (as well as to markets). This means the government could buy anything that is for sale for dollars merely by issuing dollars’’ 8. Therefore, the primary aim or the systemic purpose of taxes is to give value to the national currency. Furthermore, the creation of money is monopolized by the banking system under the supervision of the central bank which emphasizes increasingly a monoculture in money. The third conceptual question regards the definition of money: what is money? All economics books with any language in any country over the world define money as a medium of exchange, unit of account and a store of value. This definition is a functional definition as it were, In other words this is what money does and is not what money is. Redefining money in the right way or understanding what really money is or creating a new paradigm with regard to money will enable us to think on a larger scale to find structural solutions (such as crypto currency system) rather than

restricting our mental forces in thinking inside the box iterating the same methods that have clearly been showing their failure in creating a just, stable and sustainable monetary system. In addition to what have been said before, this debt money created through multiple deposit creation will be destructed in the reverse way of money creation. The source of the problem lies mainly in the continuous growing of money supply while the real sector is limited to maximum short range level called in economics potential GDP. After reaching that point in economy there is no way to increase the GDP in the short run. Accordingly, an imbalance between the monetary side of an economy and its real sector will increasingly grow as the time is running out. This excess of money supply will be absorbed mostly in nonproductive sectors particularly in properties and stock markets, especially at this juncture of an economy where the interest rate is at lower level and thus encouraging people to borrow money and investing particularly in shares and properties which lead to drive up the share prices and property prices to some extent exceeding what is fundamentally accepted in the theory of finance. Hence, the asset price bubbles commence. Due to the high demand in the stock and property markets, stock prices and property prices will reach an absurd peak and thus high price earnings ratio (P/E) will prevail in the market.(9) At that point, investors tend to reevaluate their holdings and adjust their portfolios through selling or liquidating some of their shareholdings. Accordingly, the price of shares decline drastically and the economic downturn set in. Afterwards, a big problem will arise. People who have entered the stock market just before the avalanche of stock prices may find themselves in a position which can be challenged. That problematic position is mainly due to the fact that the net worth of their investment fails below the loan principle that they had taken to finance their share purchase earlier.10 This prompts banks to confiscate real wealth of the non-performing loan (NPL) which was taken as collaterals, and more than that, they oblige them to pay the difference which can be past savings or even future income. The failure in the debt repayment has negative effects and implications for the financial sector as banks must adjust their capital adequacy ratio due to the above circumstances. In such situations banks may precipitate the repayment of other loans which some of them perhaps are not ready to repay or even on the about to become non-performing loans (NPLs). Consequently, the financial sector will observe a contraction of money supply. At this juncture, firms tend to restructure their

activities just to push down their costs in order to save cash flows to service the debt. The most popular way in doing so is laying off workers. This is exactly the phase where the crisis moves from the financial sector to the real sector. As firms retrench workers, the unemployment rate will go up which in turn drives down the aggregate demand causing a shrink in economic activity which leads to a recession. This phenomenon of money destruction prompt us to ask ourselves: are these cyclical crises a phenomenon inherent in the economy or something caused by inherent shortcomings in the dominant monetary system? After this illustration, we can respond or at least discuss what included in many economics books that the economy suffers from inherent instability which causes the macroeconomic variables to fluctuate.

Crypto currency as one of the prospective systemic solutions: It is worth noting here that the primary presumption pursuant to which we are conducting this analysis is the compliance to Shari’ah. To pave the way towards a more stable, sustainable and just monetary system we have to think from a holistic perspective that overcomes the dominant paradigm regarding money and monetary system whose with the passage of time becomes a kind of topics that we cannot question and object to it. Therefore, a radical solution has to be laid down to create an atmosphere of prosperity. The first step in achieving the aforesaid target is to redefine money. More often than not, money is commonly perceived from its material representations. However, the fact that human kind had relied on several different types or forms of money throughout the history induces us to change the way we look at money and to think of money differently or to correct our understanding with respect to what money really represents. An intuitive question arises here: what prompted people through history to transact with each other with a specific form of money? -

Is it by law?


Common agreement?




Religious beliefs?





This is precisely the corner stone of the new definition of money which is: “an agreement within a community to use something standardized as medium of exchange”.



definition is primarily related to complementary currencies. However, systems that tend to back their currency with gold as is the case of OneGram Crypto currency take advantage of gold being an effective and reliable store of value. Based on this definition we highlight the first main difference between the conventional money and the crypto currency system. While the conventional money is “legal tender (accepted in payment of taxes)” the crypto currency is “common tender” money. Crypto currencies refer mainly to the fact that they are designed to work in tandem with national currencies and not as alternatives to them (with the condition to adhere to Islamic law requirements) since there is a strong need to diversity in the monetary system as we will explain it later on. Recently, a team of researchers in the United States was working on measuring what makes an economic system stable and sustainable. Inspired by the complex flow networks either natural or human, they set two criteria in doing so: 1- Efficiency. 2- Resilience. The rationale behind relating economic systems to natural and human complex flow networks is that economic system is similar to each complex flow networks in terms of the importance of the sufficient flow of the vital substance. In other words, in each complex flow networks process there is a vital substance that enables all the system or the chain to function efficiently and in resilience: blood to body, biomass to an ecosystem and money to the economy. Hence, money constitutes to the real economy what blood is to human body. The circular flow of income is well known in economics where money circulates among economic agents flowing from one to another, output of one business serves as

inputs to another one or to a final consumer in a wide network that enables the circulation of different categories of resources and energy around the world. Accordingly, the analogy is: as the lack of blood in human body results in serious health complications which could end with death, and as the non-sufficient energy flow into planet could lead to environmental disruptions especially in the food chain, the lack or the shortage or the scarcity of money in the system will cause major disruptions in the structure of the economy which manifests itself through financial and economic crises. Consequently, money must be kept circulating in sufficiency throughout the entire system as it allows: -

Well allocation of resources.


Enables the whole system to function in a way that is beneficial to humanity.

The crypto currency system gives us this opportunity through some characteristics that will be discussed through the paper. The most striking finding of the research grants us a valuable insight in the way to establish a stable and sustainable monetary system as well as support the idea of implementing crypto currency system. This idea is: the sustainability of the monetary system for long term requires not only to be efficiently organized but also capable to adjust and adapt (resilience) to its environment, particularly in the phase of crises and downturns. This is exactly what is needed: a monetary system that is structurally diversified in terms of media of exchange and that is what crypto currency systems offer to us. On the social level, it opens the door to charity and thus enhancing the corporate social responsibility. Be that as it may, the OneGram crypto currency could provide an avenue for a systemic solution for the current inherently unstable fiat monetary system. The features and foundations of such a system could be compiled in the following points: 1. Redeemability. OneGram crypto currency is backed by gold on one to one basis. Gold is deemed to be a reliable store of value, has an intrinsic value, it is kind of tangible asset and durable and this is at odds with the fiat money. Differently stated, it is a kind of real money. In this regard, some economists and Shari’ah scholars set the key

properties of money from Islamic perspective and they summarized them as follows (10):

1) Money is either precious metals or food. 2) Money is abundant and widely available. 3) Money is durable and does not spoil or corrode. 4) Money has intrinsic value. 5) Money exists in creation and is made valuable by God. 6) Money functions as a medium of exchange.

2. Shari'ah Compliant. This central feature could be fulfilled via considering the following requirements: 1) Prohibiting interest, which is the source of unjustifiable income. As to OG there is no interest mechanism in its issuance. 2) Prohibiting transactions that are uncertain and excessively speculative. There is minimal speculation as OG is an asset backed by physical gold. 3) Prohibiting Gambling. 4) Prohibiting the involvement in non-permissible activities which definitely result in non-Halal income. 5) Encouraging profit and loss sharing based on the partners’ capital, risks share and effort. These requirements are expressly stated that they are observed in the design of the OGC. “OG complies with the Shari’ah Gold Standard [issued by the Accounting and Auditing Organization for Islamic Financial Institutions]. So you can feel safe knowing that your investment will respect your values as well as providing you with financial growth” (deducted from the whitepaper of the OGC) 3. Digitally managed and electronically settled system. In point of fact, a lot of scholars are proclaiming that these attributes should be the principal features of money in this modern technological juncture.

4. It represents an investment avenue and payment system as well. The investment procedure should be illustrated more to insure transparency in the OGC system. 5. It is efficiently priced with netting off system established between the gold value and the demand premium which ultimately ensures stability and thus increases the investor’s confidence. “No currency can guarantee absolute stability, but OneGram limits your exposure to the downside risk. Since the base price of OneGram is always at least equal to the spot price of gold, OneGram has a floor price. What’s more is that usage and market demand also adds a premium to the value of OneGram. Therefore, OneGram has a three-part valuation system to determine its market price. The first part is the Gold Value (GV), with the value being determined by the spot price of gold. The second part is the present value of the transaction fees reinvested to buy more gold (TF), with the value being determined by the usage of OGC. The last part is the Demand Premium (DP), with the value being determined by market demand. This creates the following formula for the market price: OneGram Value = GV + TF + DP”. The OGC whitepaper.

6. It is easily convertible to fiat money. “Once a OneGram Coin is issued, it can be redeemed for physical gold from GoldGuard at any time. Any OneGram Coin redeemed for gold or equivalent in fiat currency is sent to a publicly verifiable burn address, permanently removing the coin from circulation”. The OGC whitepaper.

7. The system is highly regulated. The joint efforts of many renowned companies of global reputation and large experiments, i.e., (Lloyds (insurance), Loomis (vault and secure the gold), Al-Maali CG (Shari'ah auditing), appointed auditors, DAFZ) would

give the opportunity of establishing a well-regulated payment system and a clear path of investment.

8. The first, fifth, sixth and the seventh points may be deemed as the OGC competitive advantage as compared to other crypto currencies systems such as Bitcoin. (Iwamura, Kitamura and Matsumoto; 2014) have shed light on the price instability of the Bitcoin which in their opinion is due to the weakness of regulations over Bitcoin. 9. Moreover, this kind of currency is inflation resistant since it is backed by gold, i.e., the minimum value of OGC is linked or equal to the price of gold. 10. The OGC provides an opportunity to create a monetary ecosystem through granting the current monetary system the chance to establish a diversified system which at the end results in more resilient financial system. 11. The clarity of the investment ways and the ease of purchasing process. “Buying and selling crypto currencies like Bitcoin is not always an easy task. Depending on where you live, there may be no obvious entry and exit point. Mining crypto currencies is even more difficult, requires costly equipment, and is definitely not for the average user. This is one of the reasons we are doing our ICO with GoldGuard, offering the investors an easy way to acquire OneGram Coins”. The OGC whitepaper.

12. It is established with sophisticated technology. 13. It targets several types of investors. 14. It includes Fin-tech (it is obvious). 15. The OGC could be considered as an eventual prospect of product and system diversification to Islamic finance. 16. It may represent a kind of disruptive innovations as far as the financial system is concerned.

Bibliography : (1)-Bernard Lietaer and Jacqui Dunne, 2013, Rethinking Money, Koehler Publishers, Inc, San Francisco. (2)-Bernard Lietaer and Jacqui Dunne, 2013, Rethinking Money. (4)-Bernard Lietaer, Complementary Currency in Japan Today: History, originality and Relevance. (5)-Thomas. H. Greco, JR, Understanding and Creating Alternatives to Legal Tender, 2001, Chelsea Green Publishing Company. (7)-Thomas. H. Greco, JR, 2009, The end of money and the future of civilization, Chelsea Green Publishing Company with River Junction, Vermont. (8)-Bernard Lietaer and Jacqui Dunne, 2013, Rethinking Money. (9)- Ahmed Kameel Mydin Meera, (2002a), The Islamic Gold Dinar, Subang Jaya, Malaysia, Pelanduk Publications. (10)- Ahmed Kameel Mydin Meera, (2002a), The Islamic Gold Dinar. (11)-Bernard Lietaer and Jacqui Dunne, 2013, Rethinking Money.

4. The process of purchasing gold and its redeemability to OGC.

It is of high importance to differentiate among the various fees included in the participation with OGC. o At the Initial coin offering (ICO) stage, the participant is required to register first with GoldGuard and purchase gold at live spot rates. o The existence, storage of gold and its uses: After three days of purchasing gold, the gold is physically delivered to our vault and the Goldguard company cannot sell, leverage or use the gold that is own by the customer. o This purchase includes (10%) fees of which it will be allocated as clearly illustrated in the white paper as follows: ▪

5% long term business development.

1.5% marketing costs.

1.5% operational costs (gold transport, fee to offer gold spot price, insurance, storage fees)

2% salaries.

Example: Let us say investor (A) would like to participate in OGC. The first step as explained above is to register with GoldGuard and purchase gold at live spot rate. Let us assume that the gold live spot rate is amount to 50 dollars and Investor (A) opts for purchasing 20 grams. Accordingly, the price of 20 Grams of gold would be equal to: 50 x 20 = 1000 Dollars. 10% of 1000 Dollars would equal to 100 Dollars. Therefore the total amount investor (A) would disburse to buy 20 grams of gold is equal to 1000 + 100 = 1100 Dollars. These 100 dollars would be apportioned as follows:

❖ 50 Dollars: long term business development.

❖ 15 Dollars: marketing costs.

❖ 15 Dollars: operational costs (gold transport, fee to offer gold spot price, insurance, storage fees) ❖ 20 Dollars: salaries.

o Moreover, we would find also the transaction fees estimated at 1% on every transaction accomplished by the OGC participants. Let us assume that investor (A) settled his dues to supplier (B) with OGC of an equivalent value of 5000 Dollars. Then, 50 dollars would be generated to the system and it would be divided in the following percentages: 70% (35 Dollars): is reinvested to buy more gold and increase the amount of gold that backs each token. basically what happens is that when we buy a new gold we increase the gold that is in each coin and initially one gram of gold equal Onegram coin maybe after this the 1.2 grams will be 2 two grams in each coin the simple way to look at this is we share the profit of the company with each person that hold the coin and we share this equally. 2.5 % (5 Dollars): for development and operations. 2.5% (5 Dollars): for charity donation. 2.5% (5 Dollars): for POS miner reward. o The guaranteed reward for customer : The reward for each investor is not guaranteed because it is against the ruling and principles of the shari’ah.

5. Governance aspects. The South African King Report on Corporate Governance principles (2002) could be adopted in the establishment of a good, efficient and sound governance system for the OGC with the final objective of: ▪ Setting the various aspects of governance such as management structure and process, corporate responsibility, information disclosure and exercise of control and rights of all the relevant parties to the OGC system (11); ▪ Ensuring transparency and independency; ▪ Avoiding the infringement of Shari’ah tenets, i.e., the Shari’ah compliance; ▪ Guaranteeing the legal compliance with the different host jurisdictions or the jurisdictions that endorse such a system; ▪ Protecting the investors’ rights; and ▪ Contributing to resolve the entrenched shortcomings in the present-day interest based fiat monetary system. Below is the illustration of those principles along with their application to OGC system (12). Principles


Qur’anic Injunctions

“Now surely they fold up their breasts that they may conceal (their enmity) from Him; now surely, when they use their garments as a covering, he knows what they conceal and what they make public; surely He knows what is in the hearts”. (Al-Qur’an 11: 5)

Explanation 1-Transparency is the ease with which an outsider is able to make a meaningful analysis of a company’s actions, its economic fundamentals and the non financial aspects pertinent to that business. This is a measure of how good management is at making necessary information available in a candid, accurate and timely manner – not only the audit data but also general reports and press releases.

As OGC is a kind of disruptive innovations in Say with your mouth what is in the monetary system, transparency in this your heart (Al-Qur’an 3: 167). side would be to spell out its economic benefits in terms of financial stability, financial diversity (monetary ecosystem),

diversification of investment avenues within the ambit of Islamic finance and last but not least the integration of sophisticated technologies in the system and thus keeping up with the distinguishing feature of the modern era. On the same note, the lucidity of the system’s flow either for payment or investment is highly required to maintain high standards of transparency. 2-It reflects whether or not investors obtain a true picture of what is happening inside the company. The investors with OGC must figure out among others the functioning of the system, the investment channels, investment processes, types of investment if any, risks associated with their respective investments, returns to their investments, different parties involved in the management of the system, the nature of the relationship among all the relevant parties to the system, risk management mechanisms to mitigate the potential risks linked to their investment and the protection measures of their rights.


“To Allah belongs whatever is in the heavens and whatever is in the earth. And whether you manifest what is in your minds or hide it, Allah will call you to account according to it. So He forgives He pleases and chastises whom He pleases. And Allah is Possessor of power over all things”. (Al-Qur’an-2: 284).

Individuals or groups in a company, who make decisions and take actions on specific issues, need to be accountable for their decisions and actions.

Mechanisms must exist and be effective to allow for accountability. These provide investors with the means to query and assess the actions of the relevant quarters to the system.

This requires the accurate determination of the lines of responsibilities and duties of the different parties involved in the system towards the participant in OGC.

Further, such a principle makes an obligation for the management team or the board as the case may be, to insure the compliance to Shari’ah requirements over all the process either for payments or investments. “Respect and honor all human beings irrespective of their religion, color, race, sex, language, status, property, birth, profession / job and so on”. (Al-Qur’an- 17: 70).


Responsibility (trust)

Corporate discipline is a commitment by a company’s senior management to adhere to behavior that is universally recognized and accepted to be correct and proper.

This encompasses the relevant parties’ “When you meet each other, awareness of, and commitment to the offer good wishes and blessings underlying principles of good governance for safety. One who conveys to particularly Shari’ah Governance. you a message of safety and security and also when a courteous greeting is offered to you, meet it with a greeting still more courteous or (at least) of equal courtesy”. (Al-Qur’an- 4: 86). With regard to management, responsibility pertains to behavior that allows for corrective actions and for penalizing mismanagement. “Fulfill your promises and Responsible management would, when commitments”. (Al-Qur’an- 17: necessary, put in place what it would take to 34). set the company on the right path and act responsively to and with responsibility towards all stakeholders of the company.

Shari’ah compliance is the backbone of the OGC, therefore, a set of rules and procedures should be established to proceed with any corrective action with respect to any transaction proved to be not conforming to Shari’ah rulings.

Of these measures is to lay down sound periodical Shari’ah review and Shari’ah auditing.

This would definitely enhance all the stakeholders’ confidence in the OGC system. Independence is the extent to which mechanisms have been put in place to minimize or avoid potential conflicts of interest that may exist.

These mechanisms range from the composition of the board, to appoint committees of the board, and external parties such as the auditors. Independence The decisions made, and internal processes established should be objective and not allow for undue influences.

As of OGC, it comprises different parties: ❖ ❖ ❖ ❖


❖ PWC. ❖ ABX. ❖ …… This multitude of partners would generate a kind of complex relationship. In this state of affairs, a sound mechanism which would guarantee the independence of each and every quarter in fulfilling its duties owed to investors and other partners is highly required.

A special attention is assigned to the independence and enforcement of Shari’ah regulations and decisions. The duties of this important party is to follow up the whole procedures and transactions over the system through the process of Shari’ah review, Shari’ah auditing and sometimes Shari’ah research to ensure the adherence of all transactions to Shari’ah tenets, i.e., avoidance of interest, gharar and other prohibited elements.

Social Responsibility

“Worship Allah and associate nothing with Him, and to parents do good, and to relatives, orphans, the needy, the near neighbor, the neighbor far away, the companion at your side, the wayfarer, and those whom your right hands possess. Indeed, Allah does not like those who are self-deluding and boastful”. (Al-Qur’an- 4: 36).

A well managed company will be aware of and respond to social issues, placing a high priority on ethical standards. A good corporate citizen is increasingly seen as one that is nondiscriminatory, non-exploitative and responsible with regard to environmental and human rights issues. A company is likely to experience indirect economic benefits such as improved productivity and corporate reputation by taking those factors into consideration.

-This paramount aspect is taken into consideration as the OGC opens the door to charity through the 2.5% deducted from every transaction fee and thus enhancing the

corporate social responsibility.

“Giving back to the community and setting a good example for others is central to how we do business. We seek to contribute to social and economic progress both globally and locally. With that in mind, we created the OneGram Foundation (OGF). OGF will take 2.5% of the total transaction fees that OneGram products generate and donate it to local and international charities. By sharing our success, we aim to bring relief to the lives of the less fortunate. OGF supports the principles of Islamic sharing and caring. The OneGram community is contributing, through corporate social responsibility, to humanitarian causes”. The OG whitepaper. Consultation shall be the basis of any type of decision made within the corporate. Arbitrary control by one or a group of people will definitely lead to oppression. Hence, consultation shall be part and parcel or an integrated part of the OGC governance system.


“Their affairs are decided by consultations between them”. This requires among others an efficient (Al-Qur’an- 42: 38). communication process among the relevant parties to the system to avoid oppression, “Consult them in affairs (of ensure the smooth operational aspect of the moment”. (Al-Quran- 3: 159). system, enhance the transparency and independency of all the parties involved, strengthen the Shari’ah review and auditing processes and last but not least gather all the information pertinent to the continuous development of the system.


“You are the best of peoples evolved for humankind, enjoining what is right and forbidding what is wrong and believing in Allah”. (Al-Qur’an3: 110).

The systems that exist within the OGC must be balanced in taking into account all those that have an interest in it and its future. The rights of the various parties and investors have to be acknowledged and respected.

“Cooperate with one another in The emphasis in this respect would concern good deeds and do not primarily the quarters bound to guarantee cooperate with others in evil the well functioning of the OGC system. and bad matters”. (Al-Qur’an- 5: 2).

6. Shari’ah requirements: Overall:


The Compliance and conformity with Islamic laws requires three stages that are integrated with each other to ensure that effort is made and the possibility of achieving the principles and purposes of the Sharia in this product is fulfilled. These stages are: o

The Shari'a ruling issued by the competent Shari'a Board of this company, after considering all stages of the product, all documents, contracts and order.


The Shari'a compliance: Review the first processes before and during the implementation to verify the conformity of what is implemented with what explained and submitted to the body.


The shari’a audit: which is semi-annually to scrutinize the samples through which the opinion is given in the legitimacy of the compatibility of the processes carried out with the fatwas issued by the Shariah Committee.

2. In this product, Shari'ah compliance is observed in accordance with Shari'ah rules in general and the following Shari’ah standards: ❖ Shari’ah standard number (57): Gold and its trading controls: the gold standard issued in 2016 was appropriated to spell out the fundamental and contemporary provisions of gold trading. ❖ Shari’ah standard number (1): Trading in Currencies: this standard aims to explain Shari’ah rulings pertaining to trading in currencies. ❖ Shari’ah standard number (7): Hawalah. ❖ Shari’ah standard number (35): Zakah.

In detail:

The adherence of this product to the fundamental Shari'ah rulings has been taken into consideration through addressing some aspects of the OGC mechanism, the most important of which 1. Rulings of purchasing gold at the time of issuance: ❖ The immediate exchanging in the case of purchasing gold with currency: paragraph 3/4 of Shari’ah standard on gold and its trading controls asserts on the following: “when gold ingots are sold for currencies, the counter-values must be exchanged during the contracting session. Possession of the ingot by the buyer, or his agent, is realized either physically or constructively. Constructive possession is realized by allocation of the ingot and by enabling the buyer to dispose of it, or by holding a certificate that represents ownership of a specified ingot that is distinguishable (an allocated ingot) from others, by serial numbers or other distinct marks from other ingots. ❖ The same standard in the paragraph (3/5/1) ascertains that: “It is permissible to jointly own gold where each partner owns an undivided share of a specified percentage in the pool of gold.

2. Rulings of purchasing goods and services with OGC: ❖ In the case of purchasing goods with currencies, the immediate exchange is not required: It is distinctly stated in the paragraph (3/1/4) of Shari’ah gold standard that: “Sale of gold for anything other than gold, silver or currencies as in the case of selling gold for commodities (other than gold, silver, or currencies) or usufruct or service- is permissible at any price without the requirement of immediate exchange of the counter-values”.

3. Shari’ah Parameters of investment and Mudharabah in OGC: ❖ Constructive possession of gold deposited with GoldGuard: paragraph 2/6/5 of trade in currencies standard asserts that: “Constructive possession of an asset is deemed to have taken place by the seller through enabling the other party to take its delivery and dispose of it, even if there is no physical taking of possession”. ❖ On the same note, the aforesaid standard in its paragraph 2/6/1 emphasizes on a particular point (timing) with respect to the possession of an amount of currency that is the subject matter of the contract. It says: “When a contract is concluded for the sale of an amount of currency, possession must be taken for the whole amount that is the subject matter of the contract at the closing of the transaction”. 4. The Shari’ah ruling on the disposition of gold deposited with GoldGuard: ❖ Paragraph (4/5) of Shari’ah standard No. 57 on gold and its trading controls underlines that: “Deposits of gold shall be held in trust with the depository. It is not permissible for the depository to use or dispose of deposits of gold (gold deposited with it)”.

5. Fees (commissions): The issuing and trading fees are considered as part of Ijarah. Therefore, it is legitimate from Shari’ah perspective in so long as it is fair and in line with the customary or market fees.

6. Zakah: in this regards, we continually refer to the mechanisms illustrated in the Shari’ah standard No. 35 in which the cases of corporate payment of Zakah is clearly expounded coupled with the disclosure requirements that should be included in the quarter and annual reports. 7. Shari’ah governance report: a duly annual report on Shari’ah governance is highly required.

8. The verification of the fairness and objectivity of the fees and commissions: The fees and commissions imposed by the company on the issuance and trading of the

OGC should be fair and objective and the company shall be held liable to keep proving that. 9. Charity funds: Shari’ah board shall oversee and supervise the (distribution, disbursement) of charity funds to its beneficiaries as provided for in the relevant standard or legislation or procedure. 10. Shari’ah board shall supervise the foremost operations carried out so as to ascertain their accord with Shari’ah rulings.

Conclusion: -

OGC is a digital cryptocurrency that is backed by gold and thus has an intrinsic value. Unlike Bitcoin, OGC could be acquired with a known and predetermined fee. Furthermore, the gold is produced and vaulted by a renowned company which has the necessary licenses and insurance coupled with an external auditing from a competent body (PWC).


The trading of OGC should adhere to Shari’ah rulings of trading in currencies if the counterparty in the transaction is another currency or gold. Further, it should abide by the Shari’ah parameters of Hawala in case of transferring OGC from one place to another or from an owner to another. Finally, it should comply with the Shari’ah tenets of sale and purchase in the event of using it in transactions involving the purchase of goods and services.

Investing in OGC should either comply with leasing rulings in so far as the owners are concerned or with one of the abovementioned Shari’ah parameters as the case may require as far as the investors are concerned.

Note: This research is not an advice or commercial counsel to the clients ... and disclaims its legal liability for any violations of the laws or regulations in force.