Stephen: Have you heard about Islamic finance? I know I hadn't until today, where I speak with the founder and CEO of Mahraba, which is a network for Islamic finance. But in DeFi, I had no idea what Islamic finance or the laws and rules and the contribution that the Islamic faith had to make. And we go deep down into the traditions around Islamic finance, but we also touch on things like real world asset tokenization and how DeFi could lead to a financial revolution in this area and how challenging it is when you're working around financial products that have to do with faith.

Naquib is so transparent and gives a lot of good ideas for builders in this space, especially when the Islamic faith is really focused on real world assets and physical, tangible things and how challenging it is to build in a digital world. This is a great episode and a lot of opportunities for entrepreneurs around, you know, people that are focusing on ethical DeFi and ethical finance.

This is probably the best episode to listen to. Talk soon.

Stephen: This is your host Stephen Sargeant, the Around The Coin podcast.

I have a great guest today, Naquib Mohammed, who's going to talk to us about Islamic finance. But in the DeFi, blockchain, and crypto world, I don't know anything about Islamic finance. So we're going to start with some of the basics and go deep down into the founders journey of how they've taken this concept and now presented it in the world of Web3.

Naquib, introduce yourself. Who are you? What organization do you work for?

Naquib: Thank you so much, Stephen, for giving me this opportunity to bring my, to basically speak about my story. Thank you In front of the audience, um, I have been following Around The Coin for quite a lot of time and this is like a fanboy moment to be actually be part of, uh, the PostCup podcast itself.

So, yeah, I mean, yeah, uh, so my name is Naquib Muhammad. I am originally from India, based in Melbourne, um, Australia. And I'm the founder of and CEO of MRHB Network, which is a pioneer in the field of, uh, And additional assets following the rules of Islamic finance on the blockchain. So this is something that we started, um, in mid 2020, uh, when the DeFi was just getting hot.

Um, and since then it's been a very interesting journey. Insightful journey, I would say, in the last three, three and a half years. Um, uh, obviously we'll, we'll, we'll talk about it as the, as, as we progress through the video.

My background is software engineering. I have been a software engineer all my life.

Um, 14 years, um, uh, into that industry. I work for Ericsson. I work for Huawei. I've been, I've traveled half of the world, more than half of the world, uh, because of work, uh, working with, uh, Telecom operators, um, in different technologies. I've been part of this shift from 3G to 4G and 4G to 5G. I was lucky enough to witness those first 5G devices when they were like big, um, big boxes and later we have these, you know, these little phones that we have.

So I've been part of that change. Can you,

Stephen: I want to interrupt you. Can you tell me about the telecommunications industry back when you were there? Cause you were there between about 2012, I think, to 2017, specifically at Ericsson. Uh, what were the conversations around maybe distributed ledger, cause you're a software engineer, so you're talking to all the tech people anyway.

What were the conversations back then about blockchain or cryptocurrency? Was it on anyone's radar? Were they already seeing where they can implement it in the telecommunications similar to what we saw maybe M Pesa did in Africa?

Naquib: Absolutely not.

The first time I came across distributed ledger technology, blockchain as a technology was In, um, late 2017 or mid 2017, I would say, and that was when the, um, the job industry was also heating up, uh, looking for talents in the blockchain industry.

Until then, Bitcoin was equal to blockchain, blockchain was equal to Bitcoin. I personally was never interested into this. You know, I was very focused into, into my area, into my domain. I was working in, in intelligent networks. Um, I was working in data analytics, big data mining, uh, so customer journey, that was my area.

So basically the conversations around blockchain was usually during office, uh, during coffee hours with my colleagues, never as such on a professional level coming down from the company. There were a few. Tutorials or, you know, learning materials that we used to come across but we never paid attention.

But the real hype started, you know, the real change started happening in mid 2017 when Deloitte and IBM Really dived, um, deep into, into this, uh, sector

Stephen: That is so interesting. I, I, you know, everyone has the founder's journey and so many founders talk about, you know, you know, early days talking to their friends, especially software engineers, but it was actually the job market probably around the time that Bitcoin spiked and everyone wanted to build the next Bitcoin.

That , you know, your email started to blow up. Uh, probably. Do you see any situations now from working then where you're like, Hey, I, we were struggling with this in the telecommunications industry. I think blockchain could easily solve for that. Now, is there any areas where you think that this technology is better suited in telco?

Naquib: Yeah, look, there are a lot of areas actually where, where technology, um, blockchain, distributed ledger technology will be useful in telco, is being used in telco as well. Um, you know, um, I mean, it's funny that you're asking me this question because at the moment, we are basically building a use case, uh, that we want to experiment in Saudi Arabia.

We have recently expanded to Saudi Arabia. I'll come to that. And we are trying to, you know, build up this strategy where we would be using the 5G handsets. And the other internet active devices, for example, the gaming device you have on your back, they have stored servers as well, they have their own memory.

So, you know, so using these spared, unutilized memory spaces, computing power, to power up the entire blockchain infrastructure within the network. Uh, within the telecom networks itself, where handsets would be used as validators, you know, handsets being used as validators is not a new concept, but this is something that has not been done on a, on a, on a country wide scale.

It is still in sandbox. So this is something we are trying to pitch. There are many other use cases as well, um, for the 5G network in telco, um, but yes, it's, it's, it'll be some time when we see this being implemented in a wide scale.

Stephen: Where are we with 5G? You know, so many conspiracy theories around 5G and the satellites.

Like, my phone says 5G, but I highly doubt it's the full potential of 5G. Kind of, you know, give me an idea of where we are in 5G and, you know, where we've come from, because you've been there since, you know, Since we're on kind of the, you went from three to four to five. So where are we with 5G and what are some of the biggest progressions you've seen in any industry?

Naquib: Look, 5G has almost become a necessary means of communication. And while we are talking about 5G, Ericsson is already probably working around 6G, 6. 6G. China had come up with the devices that are 6G compatible when Ericsson launched their 5G network. Uh, I think Verizon was the first one that launched it as part of the Ericsson rollout strategy, but, uh, China had already done that.

And, I mean, in terms of where we are, of course, I mean, every device is being, uh, um, integrated into the 5G network. I don't think LTE or 4G as we call it, uh, is, is having any, any further development to it. In fact, there are a lot of devices that skip in the 4G implementation and moving directly from 3G to 5G.

So that's where it is.

Stephen: Super interesting.

So, you know, you're going to educate everyone on the Islamic finance and the DeFi space. But let's break it down for somebody. Like if you ask somebody, what is Islam? If somebody asks me that, I think I have an idea of what it is, but I'm not a hundred percent sure it's not my, I don't even know if it's a religion, a culture, maybe break down what is Islam and then we'll get into what is Islamic finance.

Naquib: Okay. What is Islam and what is Islamic finance? Islam is, I mean, it's, it's a, it's a straightforward answer. I mean, It's a religion, it's one of the dominant religions in the world, 25 percent of the population of the world follow it. And just like every religion, Islam has a set of rules and ethics, um, that needs to be followed.

And that has to be followed in every areas of life. I mean, just, I mean, look, um, Islam, Christianity, Judaism, these three are the, uh, you said, the religions of the book. They're Abrahamic religions, right? So they, they branch out from the, from, from the same, um, uh, prophet, which is, uh, prophet Abraham. And there are a lot of similarities between the three religions and up to a certain point, all the religions are same.

And, and then they branched out based on the different views they had. I mean, that's ultimate a different conversation. We are not the right people to go into that. I would say, but, um, Islam is, uh, the religion that has a set of rules that needs to be followed if you call yourself a Muslim, because, you know, there is a proof for everything.

If you say like you are a boy, there is a set of characteristics you need to define saying that you're a boy. If you say that I am an intelligent person, you need to define a set of things. So similarly, when you say that you're a Muslim or you're a Christian or you're a Jew, then there are certain things that you need to follow in order for you to be part of that culture or you're part of that religion.

So that defines all aspects of life and Islamic finance or the way you handle your monetary, um, uh, day to day life, Uh, has, uh, revolves around those, um, set of rules that have been set up. So Islamic finance in politics Is

Stephen: there certain characteristics? Because I know in some religions, like there's a tithing where you, you know, 10 percent of your money should go back to either the church or the religion.

Do you have certain requirements like that within Islamic finance? Can you talk about maybe some of the more known characteristics that our audience doesn't know about?

Naquib: Yeah. So one of the, one of the Most common characteristics between all the three ways of finance, the Islamic finance or the Christian finance or the Judaism finance, as I know it, is of course the prohibition of usury or interest.

So that is common between all of them. And, uh, You know, UN has categorized, um, ethical finance on seven different levels and faith based finance is one of them. And faith based finance basically means, uh, people doing finance based on the, on the teachings of the religion. So, which is Islamic finance, Judaism, Jewish finance, or Christian finance.

And as I said, this is one of the most common, uh, thing between all of them that all three ways of finance prohibit usually interest. And as part of the. Parting away of your wealth, for charities concerned, so Islam has five pillars. So when you call yourself a Muslim, you are, you're, you're obligated to follow these five pillars.

Number one is, um, um, is, um, the, uh, the affirmation, uh, of, of, of, of one God and the, the prophet. The second is, um, obviously the, the, the daily ritual, the prayer, as we call it, the five times prayer. The third is the fasting that you do once a year for 30 days. The fourth is, of course, the, the, the, you know, the, um, the charity, the compulsory charity as you call it, the Zaka, so which is 2.

5 percent of your savings. So this is where the finance part comes in. So that is obviously finance. And this is compulsory on everybody who is eligible to pay. So it's not compulsory on every single, for example, if you're poor, you don't have anything, then you are eligible to receive this charity, not give this charity.

So that's where the distribution of wealth and the balance happens between the rich and the poor. And official estimates say that annually there are more than like 300 billion that gets distributed in the form of compulsory charity every year. So that's, that's how a balance in society is intended to be created.

And there are, there are a lot of aspects to it. Um, you know, in the olden days when, you know, when, um, uh, uh, you know, a certain area was, was, uh, was under a, under a governor that, um, and the area was supposed, I mean, everybody under that was supposed to, uh, part with, part away with the compulsory charity.

So the governor, he, he distributed the charity received within the poor people. And once, uh, and, and whatever he couldn't distribute, he used to send it to the, to the, to the headquarters in Medina. So that time the headquarters was in Medina. And the leader who was basically taking care of Medina, he used to send this back to him, saying that this is not for you to send it back to the headquarters, this is for you to be distributed.

Within the community over there, but then he sent it back saying that there is nobody to receive it. And the second year, uh, more wealth came back to Medina. And the third year, the entire wealth came back to Medina. So what gradually happened was, the, the shift of wealth that happened from Rich to Poor happened in a way that nobody was left on the receiving side in that, in that place.

And that is exactly what the spirit of is that, that there is a balance maintained in the society. The wealth flows from the rich to the poor. And this, as I said,

Stephen: You've traveled all around the world. Do you see this still happening with the younger generation? I have yet to see anyone on TikTok talk about, you know, this type of charitable donations and, you know, everyone's looking for what's mine.

I'm entitled. Do you still see in, you know, places that you've been to, um, people steadfast with Islamic finance in the way that they should be distributing their wealth?

Naquib: Look, you'll be surprised. It is more common and it is, and the most aware community is the young population nowadays. It's, it's really, really surprising.

I mean, uh, especially in the Western world, they, I mean, the, the, the, the younger generation, they're absolutely aware of it. And there are so many. Tech enabled solutions that are being created by startups that facilitate this. In fact, this is, you know, these are some of the things that we are also taking care in the products that we're building.

That how the distribution of wealth, Can happen. The distribution of charity can happen. How charity can be made to work, uh, for the betterment. For example, I mean you donate 1 to me. So your 1 reaches to me. I spend that 1. But how can that 1 be made to, to create more dollars for the receiving organization?

So, you know, so there are a lot of, uh, you know, research going into this area. There's a lot of work going into this area. There are a lot of founders, innovators who are working in this area, but yes, definitely. This thing is just growing.

Stephen: Can you participate if you're outside of the religion? Like if, you know, is that, is that one of the requirements that you have to be part of the faith in order to participate in this?

Or is, you know, even in Islamic finance. So it's someone that's outside of the religion. Come use your products and services. I think that's what a lot of people are going to ask when we started talking about the DeFi. And then I think we should even like lightly touch on, we'll probably get there as like, how do you determine who is part of the religion?

So maybe first, do you have to be part of the religion to participate in this type of finance?

Naquib: Look, Islamic finance is not only for Muslims. What is Islamic finance? Finance done as per a set of rules that have been given out by the government. Um, in the religion. Okay. So it's similar to, to any other religion.

I mean, every religion has the set of rules, but no religion in this world restricts people from a different religion to participate. This is number one, right? No religion does that. It's people mean, mean people or weak people like me, probably will do that. But the religion does not, you know, religion in itself is beautiful.

Every religion. And that's what religion teaches. Inclusivity, inclusivity. Okay. Right? That's number one. And number two, what we are building is not actually for Muslims. We are, what we are building is also for Muslims. So that was the pain point I addressed. When, when, I mean, why did I build MRHB? What did I build?

What I'm building? What, why, why did, why am I continuing to build what I'm building? Is not because it would be directed towards a specific community. Just because it would make that community participate in this technological change that's happening. That's it. That's the thing. But that doesn't, for example, you download the wallet, you transact, you send and receive crypto.

You do, um, you participate in the yields, you participate in the, in the earnings, you participate in the different, uh, uh, products that's there. That does not filter based on your religion, does not ask the question, are you Muslim? You tick, you enter, if you don't tick, the app crashes. No, it doesn't happen like that.

Stephen: And it's interesting, I guess, from your perspective, you're like, You probably do you see a lot from the Muslim community around Islamic finance where they're scared to enter the crypto market because they don't know if they're following the rules that are set out. Are you kind of helping on board that community, letting them know this is a safe way that you can still participate in crypto and Web3, but also follow the rules of kind of the Islamic faith?

Naquib: Yes, that's, I, that, that's absolutely right.

Okay, so now what is, what is Islamic defi? Okay, so you, you asked me about Islamic finance. Explain it. So Islamic finance is a finance that follows rules based in Islam. Now, when you take Islamic finance onto the blockchain, what are you doing?

You are decentralizing Islamic finance. So that becomes Islamic, these defi. Which means that the financial products that you're building in the real world, you start building on the blockchain. And it inherits the properties of the blockchain. Decentralization, immutability, smart contracts, blah, blah, blah, everything.

Okay? So which means that those financial products have to adhere to the principles of Islamic finance. That's it. Now, why we built this is because I had a problem. I wasn't sure if, if, you know, when, you know, people around me, you know, this, when this DeFi boom happened in 2020, when, um, Coinbase listed, um, uh, uh, listed Yearn Finance and, um, um, there was one more protocol I forgot on top of my head.

So this is, so that was, that was the time when suddenly the DeFi TVL started, uh, started shooting up and everybody around me, we're just talking about. Crypto, you have put 100 today, next day it becomes 100, 1, 000. So obviously, I mean, you feel inclined to know what's going on. And because I had a background already by then, the technology, I understood the technology.

So I started looking into it and then I found, no, this, I mean, anything, uh, and, and it is actually a thumb rule. Anything that, that shoots exponentially or gives you exponential returns. You, you, you, you look into the authenticity behind what's going on. So I looked into it. I discussed with few of scholars who had a little bit of idea because, you know, there's, there's a huge challenge trying to discuss because look, I can talk about technology.

I can discuss with some financial experts to talk about Islamic finance, but how do all of this fit together? You again, take back the principles to a scholar, to a religious scholar. And Rivje Scholar are people of the, people are academic people, you know, so they are not hands on people. They don't learn protocols.

They don't code. And everything in DeFi is code. So it's very hard to map all of these things together. So like we reached out to scholars, make them understand, pass on the documents, took multiple sessions to train them what this technology is. Then they started helping us to understand. If it is right or wrong, then we understood, no, it's, it's, it's not Sharia compliant or, you know, it does not follow the rules of general finance.

So that's when I thought of, no, because I'm from this industry and I understand this and being a software engineer, I can build it. So why not build it? So that's how the, you know, the first bricks were laid into, for this foundation.

Stephen: I love that. Is there anything that you have to be aware of?

Because I'm assuming, and I don't know, that there might be certain protocols, like, I know there's, I think it's Anchor and other, like, protocols where you're betting or, you know, placing bets, which I'm not sure is compliant, or, like, meme coins or NFTs that might have some kind of grotesque imagery that might not be aligned with them.

Is there any kind of areas like that that you have to navigate in building something like that?

Naquib: Yes, so, um Definitely. I mean, look, gambling is prohibited. Betting is prohibited. Lottery is prohibited. You know, NFSW images, of course. I mean, this is human. I mean, this is common sense. It's prohibited. So all of this has to be taken into, into account when you're building the protocol.

So that's why when. So, you know, our structure is a top down approach. So whenever we have to build something, it, the idea is first discussed with the, with the, with the Sharia research team. They look into the protocols, they understand what it does, they build the framework or the, or the guidelines, the new product that you're looking into.

And based on the framework that they propose, we start looking into the, you know, the technical aspects of how we could build that. So that's how it comes. Usually what happens in. The regular Islamic finance, uh, industry at the moment, you know, the Web2 as we call it, is like, you know, everything is built and finally the documents and everything is submitted to the, to the, to the Sharia committee for approval and they say pass or wrong.

But we cannot do it in DeFi because, you know, the, the, it has to be coded into it. The, the logic has to be coded into the smart contracts. So that's how we have to follow the top down approach.

Stephen: And what did you see when you first looked at the DeFi protocols out there? Is that why you had to kind of build this ecosystem?

Cause nothing was quite matching within the, the laws that you needed to follow. Is that kind of the premise between, cause you just don't have like maybe a wallet. You have a whole ecosystem when it comes to DeFi. Maybe kind of walk us through some of the top level or high level. Features or you know, the, of our participants in your ecosystem and kind of map it out for us on how it's compliant and maybe what was in the space before that wasn't meeting your company's needs or your, your, the Islamic face needs.

Naquib: You know, you, you absolutely ask the right question because you know when you are, when you're trying to build something. In this ecosystem, you have to build the entire ecosystem. You cannot build a single product because, you know, one product has to interact with another product for things to work. So you cannot just build one, you know, for example, you build a single protocol and you say that I'm building a Sharia compliant product because, again, it has to have the, the pools, it has to have the, um, the assets.

It has to have the legals in place, so all of the entire ecosystem, you know, the entire framework has to be aligned. So that's, that is one of the reasons why in MRHB we followed an ecosystem approach. We did not come up with one product. And because of that, we were criticized a lot. We are still being criticized by people who don't understand this, that we haven't seen any startup who, who make a plan of building 10 products at the same time.

This is a perfect recipe of disaster, but we know it deep in our heart. Yes, it's going to be a struggle, but without this, we cannot even succeed. How can you build a single product? And say that you're going to survive on it and you're going to onboard the next, uh, uh, you know, the next level of users who are going to use this product, who are looking for this ecosystem.

So you have to build a set of products or the set of protocols that talk to each other, interact with each other, and only then you can complete this ecosystem. So that's how, you know, we, we came up with this, you know, but the most important thing that, that led us build this is, you know, this, as I said, DeFi is exclusively.

Finance, right? It's it's financial product. But apart from Defi, there are a lot of other products as well that are being built, uh, on blockchain, which, which do not have the financial aspect. For example, if you talk about the graph protocol, uh, if you talk about anchor, I don't know why you mentioned gambling into it, because there is anchor is, uh, and infrastructure layer.

So there are a lot of products who are, who are just building infrastructures for Web3. So they have nothing to do with the five of defi. They, they're not financial products. But yes, if you take the tokens and you're putting into yield farming, obviously we have to look into it. So money by default is okay, right?

It has not, it, it is, it is, it is, it is halal, If you use that money to buy wine, if you use that money to buy, uh, to do betting, if you do that, if you use that money to do gambling, then the act in itself, the process in itself is what is not allowed, right? So it's not what money is, but what money does. Now, Bitcoin is perfectly share compliant, but if you use Bitcoin to, uh, for, for, to build a gambling product, of course it is not going to be share compliant.

So that's, so that's where it is. One is the protocol in itself and one is what the protocol or the asset does.

Stephen: It was Augur. Augur was the one I'm thinking of, not Anchor. So I do apologize. I didn't mean to say Anchor. Augur was the big bit, uh, like crypto betting. That's the one I was thinking of. I had to just Google.

I'm like, yeah, Anchor didn't sound right when it came out of my mouth. How are you, you know, like I obviously work with a lot of the blockchain analytics companies. I come from a blockchain investigations and compliance background.

Naquib: I know you were, you were, you were one of the first people I started following when I started learning about compliance, to be honest, you know, I was also following, uh, the, the, the group that Sophie, um, created the, um, the Canadian, what is that?

Stephen: The TCA. The title. Yeah. Suzanne, yeah. Comes from

Naquib: That's, that's where exactly I, I, I got in touch with you, Sergeant, if you remember. Um, uh, like five, four years back.

Stephen: Yeah, it was, it was right around the pandemic.

Tell me about your compliance journey. You obviously saw the need to make sure you understood a little bit about compliance as you're building.

Where does regulations and where does compliance or even maybe blockchain investigations, I'm not sure if you have to monitor where some of these protocols are sending funds to, or who the liquidity providers are, um, because I'm assuming they may have to be compliant as well. There must be so much that goes into building an ecosystem, as you said.

Where does regulation and compliance play in all of this?

Naquib: Yeah. So this is something that, uh, I, I, it is of a personal interest to me. And that's why I, I, that's how I knew, I know you from the last four or five years. I know the, this entire team of TCAE and everything else, you know, before I got hands on building, you know, before I started getting my hands dirty, I made sure that I'm, that I'm, that I'm, you know, equipped academically.

So I started learning every aspect of DLT. I learned the technology. I learned development. I learned solution designing. I learned compliance. I did the certifications from ICA, the International Compliance Association on, on, what was the topic? Anti money laundering using new technology. So that is exclusively on DLT.

Then I became part of AFCS and then I did certifications on, um, from, from CypherTrace, which is, which has been acquired by MasterCard. Then I did certification on, on, from BIG, Blockchain Intelligence Group from USA. So, you know, so I started learning forensics. Development, solution designing, team management, everything, you know, so a wholesome package because if you're building a product, you have to know all areas of it.

And especially when you're building financial product and you're a startup and you know that you won't find enough help in this area, you have to equip yourself. So, uh, so, so that was exactly what I did. But you know, when we started, there were not any regulations around Around. I, I would, I would, I would like to put any into quotations.

Yeah. There were no regulations. Um, uh, there were not any regulations related to defi, but, but I knew that as this industry grows. And when, you know, eyes start popping out, things will, uh, come in. And that's, and that's exactly what is happening now. Uh, and that's why we are, you know, moving from, from, um, towards a more regulated side of DeFi.

That's our next level of journey. Uh, 20, 2025, 2026 would be, we would, we would majorly focus on institutional. DeFi, where we will be working on regulated assets, um, you know, custodial assets and everything else. Right now, we are entirely non custodial and there are some regulations related to non custodial as well that's coming up, but it's not yet implemented.

But we are very clear with our mandate. Whatever is required to be compliant, we will be compliant. Because we know that, you know, keeping this rebellious nature is, is, uh, uh, it's something cool to look at, but you don't get adoption with that. You have to follow the law of the land if you're looking for adoption of your products.

I mean, why do you build something so that people will use it, right? If you, if you do not follow the law of the land, then it will be, it will be very difficult for the adoption to take place. You know, everybody cannot be Satoshi, you know, build a product and disappear so that the world carries on. That's not possible.

I mean, if you have to make this. The product really, um, um, you know, in the, in the limelight and make sure and make the world understand what you understand that, yes, this is something that people will benefit from. Then you have to follow the law of the land, you have to follow regulations, and you have to do things in the right way, the way the regulators want it.

Stephen: What are your thoughts on the way, you know, some of the regulators we see in the United States that they're going after developers who are building some of these DeFi protocols that may be inadvertently or maybe negligently laundering funds on behalf of North Korean state sponsored actors like the Lazarus Group or Russian connected ransomware administrators They're going after these ads, they're arresting developers, and technically there's no regulation, but there are some backdoors that the U.S. are able to use. Where they're kind of regulating by enforcement versus regulating by guidance. What are your thoughts about that? Are your developers concerned? Because I'm assuming, I don't want to cast a stereotype, you are catering to a certain Islamic faith, which in the media, when certain things happen, I feel the Islamic faith gets taken out.

You know, unfairly categorized when, with jihadists and with terrorism, uh, unfortunately, but that is some of the perception that we've seen in the past. What are your thoughts on that? Or do you, maybe you don't agree with that?

Naquib: Um, look, thoughts, as I said, it's thoughts. Thoughts are always thoughts.

I mean, you can have an opinion, I can have my opinion, it doesn't really mean that, that's, that's how it is.

And regulators will have their own opinion because they have to work on certain mandates. So, there's a whole lobby behind everything that happens in the world. I mean, we know this. So, as far as that particular incident is concerned that you're talking about, That's, it's one developer, right? So, I mean, let's talk openly about it.

So, it's about Tornado Cash and the main developer who was found out was imprisoned and the main charge behind is that, behind him is that although it was just the code that he did, but he could have implemented certain restrictions to prevent this. That is the argument. But when, when a developer develops, he doesn't develop it with an intent to implement it.

To make things go wrong, right? And how can you judge somebody's intent? You don't go into somebody's mind and do it. So, this is how it is. As I said, if you are building a product openly for everybody, and that's, that's why I personally do not support anonymous products. As I said, you are trying to do something for a community, for a particular group.

I'm not talking about MRHB, I'm talking about in general. I mean, you, for example, you create a DeFi product that will make AML and KYC easy. Why are you doing it? You're not doing it for yourself, right? You're doing it so that it will actually solve somebody's problem. And if you don't follow the rules of the land and you say that, no, I'm going to write my own rules, then you will not face the kind of response.

You will not get the kind of response that you expect. You will not get the kind of response that you expect. You will probably get a few people who agree

Stephen: to your mindset. Yeah, strongly agree. Strongly agree usually. But that

Naquib: group is always going to be small.

But if you really believe that what I'm going to, what I'm trying to build is going to change the world, not really change the world, I mean it's going to make a considerable difference. Then I have to follow what my, you know, my local jurisdiction tells me, or the jurisdiction that where the product is being built.

So you might, you might say that I literally answered diplomatically to you. Question but this is how it is

Stephen: No, I I think you know you answer the bait. I think you know your answer is actually you're you're right, right? There's usually a small group that contests that but as I say to everyone, you know You can be libertarian or you can run a successful business But you can't do both.

That's, you know, all the people that are like, you know, no KYC, but that, you know, they can't benefit from, you know, they're not going to be the Coinbase that's going to be listed on the custodian when the biggest Bitcoin ETFs go, you know, go haywire either. You're not going to benefit from that. So you can either be compliant, uh, and with a successful business model, or you can like live on the fringes.

But to your point, the fringes don't attract and it's not going to lead to mass adoption.

What are some of the challenges you're building this ecosystem outside of obviously making sure everything is compliant with the Islamic faith? Are there a lot of technical challenges? Uh, is it hard to find the value?

You said even when the big, uh, the Bitcoin boom in 2017, you know, job offers were going crazy. Is it hard for your, your organization and some of the team building to find that technical support? What are some of the biggest challenges that you're running into now?

Naquib: Um, there are a lot of challenges actually, when you, when, when you start building.

Something which is moving around faith and ethics because it's just not the technical challenges There are a lot of social challenges as well. Okay, so and the same things that I faced So I we have faced a lot of goodwill Very happy and pumped out about it and at the same time you face a lot of criticism as well So you have to keep navigating through it.

That's number one as far as far as challenge is concerned of course what we have what we are trying to do because it's it's related to Uh, principles that are embodied as part of the religion. So you need experts of the religion to veto what you're doing. So if I build something and I say that I have built a halal product, it just doesn't become halal because I'm saying it.

It has to be vetoed or it has to be, um, it has to be certified by a competent person who has, uh, this authority. So finding that competent person, you know, finding that scholar or the person who understands this is the biggest challenge because blockchain is a technology driven movement. DeFi is, I mean, a financial product like this is a code driven product.

And there are so many wannabes as well who want to be part of it and they And they don't know the right thing. So it's very difficult to filter out as well. The person you're talking to, does he really understand what you're trying to build or he just Wasting his time or wasting your time as well. And then after a few months, you find out, man, this guy don't really understand what we're trying to do.

Stephen: I'm so interested. You kind of brought up a little bit of a point at the start, you know, I find within religions, there's some people that feel that they're acting within the fullest potential of the religion and they look at others in the religion kind of looking at them like, well, you're not doing as much as me.

Is there that, you know, there's people that are looking at this, that are part of your religion, and even though it's being vetted and supported by certain, uh, you mentioned the name, it wasn't elders, by certain people, are there others that are like, hey, this is still not compliant with my faith and You know, they're not learning about the technology, but right away they're saying what you're doing is not right.

Do you kind of get that? I know in religion, there's always

Naquib: No, man, we get that. We get it every single day. We get it every single day. Get it every single day. You know, and that's the thing. And that is what we have to, we have to, um, accept.

Stephen: Yeah.

Naquib: And respect as a human being that these are opinions, right?

So blockchain or the rules of DeFi, right? You won't find it in the holy books. So you have to derive the principles, right? Derive. And this, this derivation is done by experts of faith. And these are human beings like us and human beings make mistakes. They have their own opinion. They have their own understanding based on their culture, their community, the way they have been brought up.

Everything. For example, if you like. Uh, bread and avocado for breakfast. I might say, yuck, how come Stephen you like that? So that's my choice, but that does not make bread and avocado as a bad breakfast, right? So everybody has their opinion. Similarly, in religion as well, people have opinion, but we as human beings, we have to respect rather than criticize.

Of course, if there is outright something going wrong, express your opinion, but be respectful. Don't, you know. Bang on somebody as if like he did a crime and and you are the only police in the world who has the duty to Stop him. No, there are ways to express your opinion. This is what is expected and Probably this is this for me is is maturity that you know how to express your views whether it is good or bad even good I mean, you don't become overexcited people say man, just don't do drama.

I'm just Okay, you are happy about this, but control. Similarly, when you are a critic, be a, be a respectful critic.

Stephen: How hard is it though? Because, you know, you have people that are trying to learn with you, and then they see the FTXs of the world. They see the DeFi protocols, which we saw 3 billion dollars worth of DeFi hacked in 2023 alone.

Does that, how do you kind of explain that and make sure that, you know, the investments that your religion and your faith are making, Are secure because, you know, you're actually going into a world that is highly vulnerable to state sponsored actors all around the world. Is that hard to explain or do people understand that this could happen to a bank just like the same amount it could happen in DeFi?

Naquib: No, so this aspect is not literally related to, you know, to Islamic finance or non Islamic finance or, you know, conventional finance as they call it. Because this is the risk that this industry is taking, right? Blockchain industry is evolving, all of us know that. And we have been talking about security, security, security, but probably the amount of funds that people are losing.

These are expensive mistakes. But things are improving over time. So if you, because you are from this area, this is your bread and butter probably, you know, the compliance and crypto investigations. So, you know, I mean that the, the numbers have gone down considerably over the years. If you see the analysis report over the years, the numbers have gone down considerably.

Right. As far as the scams are concerned, Those are intentional mistakes. They are not mistakes. They are intentional actions that are taken by, and that can happen to any industry, right? That can happen just for crypto. So this is probably how it's always going to be. You will always have somebody who will be having a bad intention, doing damage to an industry.

So there will always be people.

Stephen: Do you feel that there's other organizations, protocols are reaching out to you and saying, Hey, we love, we want to be more, you know, ethical with our DeFi. We want to service your community or can you build this for me? What is kind of the inbound, non critical, more positive things that your organization or maybe other organizations within your ecosystem are seeing?

Naquib: No, this, this is actually a good thing that's happening. You know, when we started, we were alone and now we have. Many other protocols that are being built. There are a lot of startups that are building, trying to serve the Islamic finance community. And, uh, we have been helping many as well because, obviously, because we started, we are the pioneers.

We have a lot of learnings, good, both good and bad, and we are more than happy to share that with people. So we are doing that voluntarily as well as understanding and accepting the requests that's coming from outside. Um, as far as the, um, as the, as the trend is, I mean, it's not a daily trend, of course, because there are not a lot of builders that you get in this space, but there's a lot of development happening.

There's a lot of development happening in this, in this area, especially when. Dubai has become one of the beacons of the space and Saudi Arabia, because of the Vision 2030, there's a lot of eyes on Saudi Arabia, how it's moving and there is still no regulation around blockchain and cryptocurrencies yet in Saudi Arabia.

So all eyes are on there. So, and, and because of our expansion, um, to Saudi Arabia earlier this year, we have been receiving tremendous amount of interest after that. Because if you want to work or service the business in Saudi Arabia, then you have to be Sharia compliant. I mean, irrespective of what your faith is or what your industry is, you have to.

That's where we stand a good chance as well. So the reaching out to us like how we can work together or how you can integrate. So say for example, you have SDSC and you have SDSC Amana, right? So SDSC is the conventional finance and SDSC Amana is the Islamic bank of SDSC. So similarly, can we integrate your product into us so that our users can choose what they want?

So, you know, we are, we are working on those kind of,

Stephen: um, deals a lot nowadays. You know, you mentioned Dubai and Saudi Arabia. Is it mostly, are you, you know, focused on the Middle Eastern countries? I'm assuming, you know, there's a lot of, you know, Muslims all around the world, especially in the United States and other places.

Is it, are you first trying to set up in more, in countries that have the, the, the law first, the Sharia law first, and then branch out to others where Muslims happen to be, but they don't have that kind of law within the, or within their jurisdiction.

Naquib: No, so, um, you know, when we started, of course, our focus was not any particular jurisdiction, and that's why we have, uh, our, I mean, we have tremendous numbers, by the way, of our platform, so we have almost 330, 000 app downloads, our number of users are much, we have almost 900 plus wallets that are created in our, in our application, you know.

Individual wallets, and our platform has handled more than 5 billion US dollars worth of transactions. Wow. This is coming from, from almost like 65 to 70 countries across the world. But it's majorly concentrated in, in the, in the Northern European hemisphere and Southeast Asia. Middle East is actually not our strong area.

And the, and the reason is because we are entirely English and Middle East, they usually prefer the local languages, Arabic. So our focus for the, for, I mean, our next focus is actually building solutions or making our solutions compatible with Arabic for the Middle Eastern community. So that's where our next shift is going to be.

Stephen: That's super interesting. So you have the law part down, but now it's more of the language barrier for you to go into these jurisdictions?

Naquib: Yes, it's the language barrier.

Stephen: And you're in Australia. You're part of, I think, Blockchain Australia with the organization there. What's the community like there? Are you planning to stay there?

Or are you planning to kind of dive down and go into maybe Dubai or Saudi Arabia? Maybe talk about the industry in Australia and what your plans are.

Naquib: Yeah, so that's actually a good question. It's a good moment for me to flaunt myself as well. So, you know, when I was in Saudi Arabia and I was building MRHB, so it was in Saudi Arabia where I conceived the idea and I started building it.

So that was the time, as I said, I, as I mentioned previously, like, I started learning across, I started having a holistic view of the entire, of the entire, Blockchain ecosystems, you call it, you know, from development to, um, business to compliance, forensics, everything. So I started writing a lot, publishing a lot, networking a lot, uh, conducting seminars and sessions for general awareness.

So that's when my profile started getting noticed, started growing. There was this program in Australia at that time that was introduced called Global Distinguished Talent. I think they have something similar in the UK as well and probably in Canada as well. So, um, we came up with this and that's when I got the opportunity to come to Australia as a distinguished talent in the filter category and specifically to blockchain.

That actually opened my eyes to how matured the Australian ecosystem is in terms of this. I mean, they have come up with a national blockchain framework in 2017. Thanks for having me. So, Australia was the first country to actually come up with that. And digital assets here is treated just like, you know, any, any, any other, um, currency.

You have proper taxation rules, you can receive, you can, you can pay people in crypto, you can receive a salary in crypto. It's a, it's a very normal thing. It's a very normal thing. You, you have a lot of, uh, uh, lawyers who understand this. You can talk to anybody freely. It's not like, you know, Hunting people who understand what you're trying to do.

So, uh, it's, it's, it's very good as part of the community is concerned. It's a, it's a small community, of course, Australia itself, because I mean, it's a huge country. It's a continent, but the population is less. So in this, obviously there are even less people compared to the population in other countries.

But still, it's a very matured community. I mean, you won't find time wasters here. You won't find people who are looking after us, after us. You know, uh, basically you won't find flippers here. This is, this has been my personal experience. Really, really very matured community.

Stephen: I love that. Talk to me about some of the features. I looked, I had a look at your roadmap. It looks like you're coming out with maybe your own token. You talked a little bit about your expansion plans. Your, you know, your focus on regulatory compliance plans. Walk me through the roadmap in Mahraba.

Naquib: So, uh, no, we are not planning to come up with a token. We already have a token, um, uh, which we released in December 2021.

And, um, regarding the roadmap, of course, we have, um, new products that are coming up. As I said, our focus is, uh, Uh, for 2025 and 2026, and this entire year would shift towards more of regulated assets, institutional DeFi as we call it, and that's where we are trying to make more partnerships happen. I'm trying to acquire licenses from, from Singapore, Monterrey Authority, Singapore Mass, and the local AFSL license as well.

So once you have the related licenses, you can start offering regulated financial services to people which will be treated, you know, it's almost like, You're trying to make things as easy and beautiful as embroidery. You know, in the front, it looks really good, but in the back, it's a lot messy. So people don't need to know what's behind.

They need to interact with this ecosystem just the way they're interacting with any financial product. For example, especially after the Bitcoin ETF approval in the U. S. or the Bitcoin ETF has been existent for some years now, but After the US acceptance of Bitcoin ETF, the awareness has grown even with the, among the general people, general class as well.

Today, 4th of June, it's a historical day when we, we, we got, we had the first Bitcoin ETF in Australia. So today they, they rang the bell for the first Bitcoin ETF in Australia. So things are happening. Uh, I have recently, um, started working, um, For a real estate investment platform that that I mean for not working in a sense like Working to bring that real estate investment platform into into MRHB.

So this would be something that would help tokenize, fractionalize Real estate properties, impact projects. So there are a lot of impact investments that will be possible. For example, there's a Fisherman in Indonesia who has, uh, who has this property, who has a farm and he wants to do fishing business, but he doesn't have the, he doesn't have the funds to do that.

So you basically tokenize his entire property and you crowdfund it through the help of, uh, um, uh, uh, you know, uh, uh, the, the tokens. And he builds his business, he shares the revenue among the token holders. So, the actual use of tokenization. And as BCG also estimates, you know, most of it, most of the financial assets will be tokenized by the year 2030.

So, that's where the trend is going and we

Stephen: Is there certain products or financial products and service that you find the Islamic finance or people within, I'm assuming maybe you have, you mentioned that there's certain banks that, you know, kind of house these transactions and products. What's the most common use for the traditional Islamic finance?

What were they investing in? Things like real estate, you know, bonds, like nothing to, like, you know, were they're investing in startups? Like where, you know, where would those funds mainly go to in the traditional sense?

Naquib: Look, in the traditional Islamic finance, the preference of, look, again, this is my personal observation of the industry.

I won't,

Stephen: I won't. Yeah, it's hard to map out. I'll give it to everyone.

Naquib: Personal observation has been that the majority of investments go towards real estate. And commodities. So that's where the preference of investors is. And that's also you won't even say it's, it's like an Islamic culture. Hard money is always preferred.

Hard money has always been preferred. And that's why investment towards assets who are physically present are also preferred even in today's world. We have struggled a lot raising funds for our business just because we are a software company. If we would be a manufacturing company, we would not have struggled.

Stephen: Interesting.

Naquib: From, yeah, so, so this is how it is. So we'll have to look into. Tokenizing as well, investments into these areas.

Stephen: So you need physical assets to kind of, you know, partner with some of these digital assets to make that community feel a little bit safer in investing. Is that accurate? Yes,

Naquib: yes, yes. So that's what I said. The real world asset, the RWA trend that's flowing, that's exactly where we want to channelize our entire energy and focus.

Stephen: That's super interesting. Talk to me, you talked about hard, you know, like physical assets and tangible things, you know, I know UAE specifically was very cash intensive, which probably led to some of the issues that they've had around money laundering and funds.

Um, talk to me about Hawala. I don't know if Hawala is connect, directly connected. Is it similar to Islamic finance and is this the way that money usually moves around within your communities? Does Hawala have anything to do with Islamic finance? Or is it similar, is this being used in certain parts of the world?

Naquib: So Hawala can be both legal and illegal. I mean, Hawala has been properly institutionalized. And convert it into business and you call it WISE. What, right? What does WISE do? That's what it does, local settlements. So Havala is nothing but local settlements, right? So you pay the money here, they settle it locally and they, uh, uh, they pay somebody else.

If you do it with an intention to launder your money that you don't want to speak to anybody else, that's of course illegal in terms of the, uh, The world, you know, I mean, of course it would not be allowed in the, as per Islamic finance. So that's, so that's, so this is how it is.

Stephen: That's super interesting.

Naquib: Yeah, I mean if you have hundred thousand dollars and you have no fear in, in, in, in, um, In saying that this, this is how I obtained my 100, 000 source of funds, it doesn't matter, right? But if you don't want to say, of course, you will hide it.

Stephen: You, you talked about, you know, and it's funny, like, we have a lot of entrepreneurs, tech, people in the tech and payments and crypto space that are probably looking at you like, hey man, building a software business is way better than, you know, uh, uh, A hard asset business or a manufacturing where you have employees and, you know, depreciating equipment, things like that.

Talk to me about any advice that you have for builders. You built in the middle of a pandemic, probably around the time there was an up and down market, especially when it came to crypto, it went really, really up fast and it came down pretty quickly as well. Now it's kind of leveling out above. Uh, any advice that you have for other people, and maybe some of the advice that you've given other, you know, Islamic finance, um, startups that are looking to get into the DeFi space?

Naquib: Look, building is really important, uh, Stephen, right? Building is very important, and somebody has to build. People have to build, people have to innovate. And if we always try to play the safe card, then the world would never progress. It's just not about the sector that I'm, I'm, I'm focusing on, but about anything in the world.

So, builders and innovators are the ones who are basically taking the world the next step ahead. So, my advice would be to everyone building in this space or in any space. I mean, just if you, if you, if you totally believe what you are building and you have done, you know, so just believing, blind belief is not required, you have to do the market validation as well.

For example, if I believe that, uh, having, um, um, a cappuccino with a brewed green coffee is going to be the best thing in the world, that's because that's my personal preference. I need to do a market validation before I make it commercial. So I'm talking about that. So if you have done a market validation and you've done a survey and you think that, yes, what are you trying to do is important.

Go ahead. Things are not going to be easy. If things would be easy, everybody would be an entrepreneur, right?

Stephen: Right. I love that. I love that. Where can people connect with you? Cause I'm sure there's a lot of people that listen to this podcast and probably like, Oh, I didn't know that there's DeFi opportunities where I can still follow the laws and the Islamic faith.

Where can people reach out to you? What's the best place? Is LinkedIn still the best place? Are you deep into crypto Twitter? Where can people find you?

Naquib: No, so LinkedIn probably would be the best place. Yeah, so I'm really active on LinkedIn and I read every single message.

Stephen: I love it. What are some things that you're looking forward to?

I know we talked a little bit about the roadmap, but is there any projects that you're looking at that might not have nothing to do with Maharajah or your organization that you're like, Oh, this is just interesting to me, or I'm really keen on, you know, maybe ZK proofs that are, you know, kind of emerging as right now.

What are some things that you're interested in?

Naquib: Yeah, so I'm, I'm interested actually in a lot of, um, a lot of areas that, that is innovating right now. So I have been an investor as well. I do invest in some of the early state, uh, uh, early stage products. I have invested in a couple of them, which are, which, which we'll see, uh, life coming there.

I'm personally very much bullish and Um, you know, following the, the, the projects that are working on the, on the, on the infrastructure level, the Deepin, uh, trend that's going on, the, uh, you know, the decentralized, uh, decentralized physical infrastructure network. Those are the projects I'm closely following.

I'm bullish and, and some of them, as I said, I have invested as well. I'm, I'm very speculative about the AI projects building in, using blockchain. Very speculative to be honest, because I personally feel that it's still too early to invest a lot into that area. So, um, Yeah, so the, the infrastructure projects are the one that, uh, that, that I follow closely.

Of course, ZK is doing wonders. It has proved what it's capable of. There's a lot of investment coming into zk. There are a lot of projects that's building on zk. Um, especially around authentications and, uh, you know, um, uh, yeah, I mean, authentication's just not related to the user, but also related to the, to the KYCs as well, your area, you know,

Stephen: Where do any of your developers use AI to help out build out smart contracts?

Like We hear AI can do all these things, build, you know, protocols and platforms. I'm assuming that, you know, most developers aren't using it 100%, but do you see them using it to kind of supplement some of the, the code that they're writing, etc?

Naquib: You know, 100%. I mean, I use it personally as well. I, I, I use, uh, I cannot survive without, uh, uh, without, um, you know, automated coding technologies that, that, that AI, AI has facilitated.

But of course, the talent of the developer is not to get the right code out of it, but to, but to analyze if the code is right. So it's not about being a good developer, it's being a good tester. You have to be a very good, um, So it's a lot of work for an analyst and a quality assurance engineer, if you call it that way, to, you know, to, to get the output, what you need and to, to understand if it's going to do its job.

But yes, I mean, the productivity has increased tremendously because of this.

Stephen: That's amazing. You know, you don't hear people talking about it as much. Lastly, you know, you, you have this amazing ecosystem.

Are there rules around how you can market it to your community or to your, like marketing is always a very touchy subject when it comes to regulations.

I know in the UK, the FCA comes in and says, Hey, If you're going to say, you know, crypto is the future, you better put that big disclaimer at the bottom of your ads type thing. Are there any issues with the way you market this product to the Islamic finance community?

Naquib: This is one area I would be, uh, you know, I would probably smile within me because this has been our weakest area, uh, Stephen, I'll, I'll be very transparent in admitting.

We have been very bad in marketing our product because we really don't know how to, um, how to convey the right story and how to take it to the public. Um, and we have been doing bad and this is one of the, um, drawbacks as well that we have faced from, from the beginning. As far as the legal side of marketing is concerned, we don't do anything without Uh, without the legal consultation of our team.

So we have a team of lawyers, so we consult with them for everything before the official message is sent out. So that is taken care of. But the marketing in general That's probably a lengthy process of your time.

Stephen: That might be the reason why you're marketing. Yeah. I love it. This has been an amazing conversation and from a content marketer to you, I think the best way is education.

I think just this conversation will educate people. If you can educate people on what's traditional and where you're trying to go with it, I think that always helps a lot. You don't have to sell your product. People, you're just explaining and educating people and they'll come to you for more insights and more information and how to, how to touch some of these protocols and how to invest some of their money.

Thank you so much.

I think this is such an important conversation. I came in completely green as people would say. I knew nothing about Islamic finance, but I have a really great understanding. It's always a touchy subject because you're talking about religion and that's always a touchy subject. Yeah, I mean, it's about a business opportunity as well, Stephen.

Without, you know, maybe taking too much of a dive into that.

Naquib: Yeah, I mean, look, the market is big, uh, Stephen. Probably I didn't mention about that. So it's a, it's a 6 trillion market. Islamic, Islamic, the halal market is a 6 trillion market. So that's, and out of which almost 3. 9 trillion, almost 4 trillion is just Islamic finance.

So 4 trillion worth of market out there with zero liquidity in Islamic DeFi. I mean, look at the amount of opportunity we have. Right. So it's just about creating the right product, As you said, uh, educating the people of how they could benefit, why it's important for them, just not how to use, but why it is important for them, why they should use it.

So these are the things, few things, if we get it right, then, then, you know, there's, there's, there is so much to do. There is so much to build as well beyond that.

Stephen: I love it. I think you're building something the market eventually is going to come to you. Right. Where they're like, we need something that follows these principles.

And to your point, I don't think it's, it's going to be the Islamic finance. There's going to be other, as you mentioned, the UN they have, and I think on your website, you talk about some of these sustainability goals that they have, there's going to be soon. There's going to be investors that only want to invest in what you're building and they don't want to invest in other DeFi protocols.

What are your thoughts about some of those sustainability goals with the U. N.?

Naquib: So, yeah, so there are, you know, those SDGs, um, of course there are, there are some SDGs that we follow and, um, and ethics is something that's, you know, sometimes Islamic finance in a lot of areas of the world, it's also termed as ethical finance because, you know, It is, it follows ethics.

Uh, so we have to basically, you know, make sure that we follow the the, the, the framework and it automatically, you know, adheres to the, to the, to the goals out there that's listed by them.

Stephen: Awesome. We're going to link everything in the show notes. Naquib, thank you so much for this educational yet fun and interesting conversation.

I think people are really going to enjoy some of your metaphors.

Naquib: Thank you so much, Stephen. I mean, it has been a real pleasure talking to you as well. Um, very genuine questions and thank you so much for digging deep into me and I hope, uh, uh, people benefit from, from, from what they hear. And yeah, uh, uh, looking forward to, to see more and more informational podcasts from you as well.

Stephen: I appreciate it. Thank you so much.