From crypto to community: Shariah-compliant investing for the digital age

As markets swing wildly and ethical concerns grow around conventional finance, Muslims face a vital question: How can we build wealth while staying true to our faith?

Shariah-compliant investing isn’t just a niche concept - it’s a necessity for Muslims navigating the complexities of modern finance.

It’s a pathway that not only protects against haram practices like interest but also empowers us to contribute to an economy rooted in ethics, fairness, and social good. Let’s explore why finding Shariah-compliant investment opportunities is essential and how they can help us thrive both spiritually and financially.

The ethical imperative: Beyond profit
In conventional finance, success is often measured solely by returns. The higher the profit, the better the investment. But as Muslims, our approach must differ.

Wealth in Islam is a trust from Allah SWT, and how we earn, spend, and grow it reflects our accountability to him.

Shariah-compliant investments screen out companies and industries engaged in haram activities like alcohol production, gambling, and conventional banking. But it goes beyond avoidance. These investments prioritize industries that benefit society, such as renewable energy, healthcare, and education.

This ethical foundation ensures that your financial growth does not come at the expense of harming others or compromising Islamic values. It’s not just about securing your future; it’s about doing so in a way that serves the greater good and pays it forward for the next life.

The key question, of course, is how Muslims can invest in a way that aligns with their values. While the list of options is extensive, this article highlights a few investment ideas that are often overlooked.

It is important to note that this is not an exhaustive list, nor is it intended as investment advice.
 

Diversifying with crypto: A modern opportunity
One of the most exciting developments in recent years is the rise of cryptocurrency as a Shariah-compliant investment option. Digital assets like Bitcoin have reached new all-time highs earlier this month, crossing $103,000, which demonstrates the acceptance of blockchain technology and the potential for Muslims to participate in this transformative market.

Wondering how cryptocurrencies could be Shariah-compliant? To answer that, let's first take a closer look at the alternative: fiat.

Fiat currency, issued by governments, is not backed by physical commodities like gold or silver. Instead, its value comes from trust in the issuing authority. Central banks have the power to print fiat currency on demand, effectively creating money out of thin air. Those are a lot of red flags from a Shariah perspective.

In contrast, cryptocurrencies like Bitcoin are decentralized and operate on a fixed supply, ensuring scarcity and preventing arbitrary inflation. Unlike fiat, they rely on blockchain technology to provide transparency, immutability, and peer-to-peer transactions without intermediaries. This makes crypto an attractive alternative for those seeking a more stable and equitable financial system.

Cryptocurrencies, when approached thoughtfully, align with Islamic principles by emphasizing decentralization, transparency, and asset ownership. Unlike fiat or speculative trading, long-term investments in established cryptocurrencies or projects with clear utility can provide an good avenue for portfolio diversification.

However, there are big differences between different types of cryptocurrencies, so make sure to thoroughly research any crypto you consider investing in. 

The new halal economy: Building the future
Beyond cryptocurrencies, blockchain-based organizations offer another Shariah-compliant investment opportunity by solving real-world problems and emphasizing transparency.

For example, The LifeDAO is pioneering a Shariah-compliant, community-owned alternative to life insurance that allows Muslims to invest in the financial future of their families by covering burial costs and other short term expenses should a loved one pass away. Plus for a limited time, early adopters also get to participate in the platform’s revenue through exclusive revenue-share NFTs. 

At the same time, halal mutual funds, Islamic real estate investment trusts (REITs), and digital platforms are opening doors for Muslim investors.

Companies like Wahed and Ethis simplify access to Shariah-compliant opportunities, helping Muslims grow wealth ethically. Such innovations demonstrate how modern technology aligns with Islamic ethics, creating opportunities for Muslims to invest in the future while adhering to their faith.

Shielding wealth from volatility and risk
Modern economies are often destabilized by speculative practices and excessive leverage, both of which are prohibited in Islam. These behaviours contributed to major crises like the 2008 financial meltdown.

Shariah-compliant investing avoids these pitfalls by emphasizing tangible assets and real economic activities. This approach not only aligns with Islamic principles but also provides a more resilient foundation for building wealth.

The path forward
So, where do we start? The first step is education. Understand what makes an investment Shariah-compliant and seek out trustworthy advisors and resources. 

Second, take action. Start small if needed, but be intentional about aligning your portfolio with your values and make investing a regular habit. Look for halal options in your local market or explore global opportunities in Islamic finance.

Finally, remember that Shariah-compliant investing is not just about avoiding the haram; it’s about actively supporting what is halal and tayyib (pure and wholesome). By choosing investments that uplift communities, protect the environment, and promote ethical business practices, you become a part of an economy that reflects the principles of our deen.

In today’s economy, finding Shariah-compliant ways to invest is not just important; it’s transformative. It’s a means of preserving your wealth, protecting your values, and contributing to a better world.

And in doing so, it’s a step closer to living a life that truly embodies Islamic principles.

Sharene Lee is chief operating officer and Ameerah Langer is brand & communications head at Takadao