The New Frontier E001: Bitcoin And The Middle East

Welcome to The New Frontier, a Bitcoin centric podcast that bridges the gap between the transformative world of Bitcoin and the unique financial landscape of the Middle East. This podcast is brought to you by Onrap Mino and is Co hosted by Ralph Debran, Managing Partner, Onrap Mino and Harris Irfan. CEO of Cordoba. Capital Markets and advisor to Onrap, Mino, Ralph and Harris have built their careers in traditional finance, accumulating extensive experience across capital markets, investment banking, and asset management. Each episode delves deep into how Bitcoin is reshaping finance, technology and investment within the region and beyond. From macroeconomic trends to real world applications, and from Islamic finance to sustainable energy practices, this show covers it all. In this launch episode, we'll cover Bitcoin on a global scale during the first half, and in the second-half, we'll discuss Bitcoin in the Middle East and its intersection with Islamic finance. So sit back, relax, and join us in the new Frontier. Hello, welcome to the New Frontier, a On Ramp MENA podcast. My name is Ralph Jabran, one of the Co hosts and managing partner at On Ramp MENA Harris. Why don't you introduce yourself? Thanks, Ralph. My name is Harris Irfan. I'm the CEO of a company called Cordoba Capital Markets or CCM, which is a company finance company that raises working capital in the form of listed profit sharing share a compliant notes. I'm also an advisor to On Ramp MENA and I'm the author of a book called Heaven's Bankers Inside the Hidden World of Islamic Finance. Right. So maybe as the first episode, we'll give our viewers a little bit of a background of this podcast, what it what they can expect out of it. So what we'll be doing is we'll be producing this podcast on a biweekly basis and we'll be covering a variety of topics such as macroeconomics, Islamic finance, how Bitcoin integrates within the region itself. We'll also be bringing in guests locally and from all over the world. So stay tuned. It's going to get interesting. And you know, there's a lot to learn from this. Thanks, Ralph. Why don't we kick off the podcast? This is obviously a bit of a strange one because you and I are speaking to each other. And I think one of the intentions we have from this podcast, the episode one is to get a feel for the series as it develops. And as you say, it's the intersection of, you know, Bitcoin, the MENA region, Islamic finance, which I think is a pretty unique sort of theme for our podcast, which hasn't hasn't been covered anywhere else before. And why don't we start that by, let me ask you the first question, which is an overview of Bitcoins role in the global financial landscape. Can you give us a bit of a sort of a high level view of it? What is its current role in that financial landscape? Yeah, of course. So, you know, really it depends who you ask because someone in the West might view Bitcoin differently than someone, for example, in the Middle East. Someone who is financially secure will view Bitcoin as, for example, a store of value versus someone, let's say, in Lebanon, for example, the country that's been severely hurt by hyperinflation might view Bitcoin as, you know, a way out, a lifeline. So it really does depend who you ask, their circumstances and where they're currently, you know, situated. So Bitcoin serves many roles. It could be a portfolio asset viewed simply as a commodity, similar to gold could be viewed as a medium of exchange in certain countries where the banking system there's no infrastructure to service the people. For example, in Africa, lots of people can't even get access to a basic bank account because there's a lack of government infrastructure to support the opening of the accounts. There's no ID IDs issued, etcetera. So really Bitcoin can be many things, but in general it is viewed as a store of value asset, something you hold on to to protect yourself from inflation, something that you own really once you own it the right way. Yeah. So let's expand a little bit on that. I mean, clearly Bitcoin is the market dominant cryptocurrency and Bitcoiners don't even like to associate it with cryptocurrency. So tell us a little bit more about its market dominance and and how that influences its position in the financial world. Yeah. So in our sphere we say Bitcoin, not crypto for a reason. So Bitcoin is the scarcest of all the digital assets. Some people might view it as being diluted because there's around 30,000 other crypto tokens, but Bitcoins really not competing with any of them. Bitcoin is hard money. I would view it more as competing with the likes of gold or current Fiat currencies. And if you really look at the dominance, you know, we have one chart, maybe we'll share it later with the viewers. But if you look at a 1012 year history since the creation of crypto assets, Bitcoin has been #1 consecutively every single year. If you look at all the other positions of the top ten by market cap, you'll notice that, you know, over two years, there's a new second in place, a new third in place. Some of them even never show up again. So really when you look at dominance Bitcoin both from a regulatory point of view and from a usage point of view and from an adoption point of view has really LED in the space. And the reason why personally I think is because it is based on sound money principles and it's not trying to be the next Google. It is not a tech stack. Some people like to view it as a technology, but in reality what it is is a hard form of money. Yeah. You talked about adoption there, and I think that's really, really interesting because, you know, Tranfi traditional finances is one of the means by which it gets adopted, at least in the short to medium term. So, you know, in what ways do you think Bitcoin is being integrated into Tranfi, you know, by major financial institutions? Yeah. So, you know, as a first step, we can pretty much see there is some coherence and some unity on how they view Bitcoin. Previously it was viewed as a speculative asset, so they wouldn't touch it. But as you know, people started to understand it, started to learn about it, It started to transition into this store of value, especially with the current political environment all around the world, there's been, you know, overreach in certain areas. So it's a way that these institutions have been somewhat marketing it. For example, BlackRock, BlackRock did a 180 switch on Bitcoin and then really those ETFs really were a stamp of approval from the institution of space. And for example, in Canada, Fidelity, what they did in their standard smart portfolios that you know as a retail person you would just buy and you get an allocation to diverse set of assets. They've included a 1% allocation to Bitcoin. So indirectly, without you knowing it, when you buy the portfolio, you're getting exposure to Bitcoin. And that can't be said of other cryptocurrencies because it's easy to categorize Bitcoin in multiple ways within a portfolio. So it can be viewed as a commodity. So it would be kind of in the commodity bucket alongside gold real estate, so as an alternative investment. But some view it also as a tech investment because on top of Bitcoin, you can build multiple layers of different technological infrastructure, for example of the Lightning Network, which is focused on payments. It can also be viewed as a venture investment, similar with similar risk return profile. So it gives portfolio managers and you know, traditional investors this, this, this choice on how to allocate it within their portfolio depending on their subjective views of the asset itself. So over the years, we see that what was once a speculative asset, some would call it rat poison, has turned into a, you know, get off 0 type of asset where, you know, you should allocate at least just a little. Yeah. Yeah, I mean, so that that's a nice overview of, of, of Bitcoin, it's relevance in the world. Let's let's these are all things that we're going to touch on as we go through the series and, and hopefully we'll do a deep dive on all of these issues. But maybe we can touch on briefly the transformative power of Bitcoin in finance. How do you think Bitcoin is transforming traditional finance? And you know, what are some examples of that transformation in action? Yeah. So what are the biggest transformation, and we've seen a few currently adopt it, is Bitcoin being considered as a treasury reserve asset? So, you know, typically they hold on to cash or cash equivalents like treasury bills. That has been the strategy for decades now. But you know, the the Cowboys would potentially invest in more traditional assets, but typically 90% would be in some form of fixed income, very low risk type of assets such as treasury bills. But companies such as MicroStrategy have revolutionized this space. And not only MicroStrategy, there's a company out of Japan as well who's been adding Bitcoin onto its balance sheet and it's done well for the stock in general over the last few years. So viewing Bitcoin as a asset that every company should hold to protect their purchasing power. You have companies like Apple who carry 150 billion in assets, in treasury assets just sitting there. And you know, when, when inflation kicks in, that's a melting ice cube basically. So some of them are using it strategically to, to compensate for that. The basement that's happening due to monetary printing and monetary easing. So I think that's the major component of the way finance is being transformed. The other component is the custody business because, you know, in traditional finance, no one really asks about the custodian. It's, it's an afterthought. Like when you buy a stock, you don't really ask who's, who's the custodian. Oh, I'm not comfortable with that custodian. It's not really a choice. You just buy the stock and it's custody. And I can understand why because at the end of the day, it's a, it's a digital record. And if something were to happen to the custodian, it's easy to spin out the same digital record saying that you own X amount of shares. But with Bitcoin it's different because there's only 21 million if the asset is lost at the custody level, it can't be created again. So custody is taking a very different form, right? Because and Bitcoin allows, you know, a variety of custody models, whether it's self custody where you take possession of the asset and you're responsible for it, whether you use multi collaborative custody where you hold the majority of the keys. But I think the future is more geared towards something called multi institution custody. And the reason why is because it decentralizes how Bitcoin is held. You have the ability to use its multi signature protocol to spread out risk across multiple counterparties. An asset that's so scarce and so valuable needs a more robust custody system that doesn't have single points of failure. And I think those two elements, the treasury strategy and the custody businesses in traditional finance, will be changed because of Bitcoin as an asset. They have to just, you know, figure it out. And we're seeing so many innovations within that space. And on top of that, even from a payment point of view, we don't want to forget about, you know, all the payment services that are being created on top of Bitcoin. For some people using the Lightning Network, for example, as a layer 2 protocol, sometimes they don't even know they're using it because you can move dollars from one location to another on top of Lightning, and the user only sees a movement of dollars from one end to the other. But what happens is it gets converted into Bitcoin, pushed on the Lightning and then transferred there. And it's facilitating remittances, it's lowering the cost of moving money across the world. So these are the primary transformative aspects of Bitcoin. And you know, one thing we want to mention to our viewers is there is actual regulation that will be facilitating the counting of Bitcoin on corporate balance sheet. So the fast be so that's going to be kicking in and we're likely to see a higher rate of adoption of the strategy. So Michael Saylor from Microstrategy's playbook, we view it as a potential, you know, a potential bet that some kind of companies will be doing moving. Forward, yeah, we, we're going to touch on regulation a little bit later in a little bit more detail, but there was a, a couple of characteristics of Bitcoin that you mentioned just just then and I thought it might be useful to compare it to traditional assets. You mentioned gold and real estate before. What makes Bitcoin a unique portfolio asset? Well, first one and the most important one is it's scarcity. So similar to how gold is scarce, Bitcoin becomes scarcer over time. So there's a cap on these total supply which is at 21 million gold is scarce, but there is also uncertainty around that scarcity because finding a deposit of gold somewhere we that was not known of will dilute that supply and dilute that scarcity. The difference is Bitcoin is absolutely scarce. It's pre programmed from day one. And what's amazing about that is that, you know, as adoption increases with a inelastic supply, you would expect the value to keep going up. So that that's kind of pre programmed into the code. So from portfolio point of view that's very different because that's kind of a extremely hard asset that you're holding on to that that that is likely to keep appreciating as more and more people want to own it. There's just not enough to go around. Compare that to real estate. Some people say real estate is scarce, but you know, real estate is scarce artificially because there's government regulation. There's a lot of bureaucracy there. The reality is there's a lot of land everywhere in the world that's uninhabited. It's just that, you know, it's not as easy to develop. So there's that inherent, you know, you know, like limited, scarce, constrained scarcity is what I would like to call it. And people fail to consider a lot of the costs that come with real estate because real estate as an investment within your portfolio, if you actually own the physical asset is, you know, costly between, you know, taxes on the property, between the maintenance cost of the property and it's very immobile. So Bitcoin has absolute scarcity. It's extremely mobile as an asset. So it's held the right way, whether through, you know, a multi institution setup, multi collaborative setup, or even through self custody, you know, you can move it and you can move it wherever you want to relatively quick. And you can't do that with gold and you can't do that with property. So as an asset itself, just the return and risk profile, yes, it is volatile, but if you look at it over a long enough period of time, which is what most institutional investors do, they look at 5:00 to 10:15 years. Most pension plans have such a long time horizon that when you take that into contact Bitcoin volatility is is really is really minimal. Like they're if they can allocate 1 to 5% to it, then it doesn't really matter because what it does and it increases risk adjusted returns so much. Bitcoins performance and returns are actually asymmetrical. They don't follow really a normal distribution. It's like skewed to the right. So it's one of those asymmetrical investments that you can take on that has very little cost to hold and to manage and gives you also the option for extreme mobility. So as an asset, that alone has value and it is anchored in reality. And it's decentralized in the sense that it's extremely difficult to influence and to manipulate, which is a hedge against not just, you know, inflation, but it's also a hedge against, you know, oppressive governments and governments that may overreach. So it's kind of like the people who buy physical gold and bury it in their backyard. It's like their Armageddon scenario, but the reality is, if there was an Armageddon and you had a bunch of gold and you wanted to leave with it, you're not going to get very far. You put a target on your back and at the airport, you're going to be, you know, beeping like like there's no tomorrow. So versus holding Bitcoin, you don't even have to move it across. You can have, you know, relative set up a family wallet somewhere else, transfer the Bitcoin and just happily move on with your life. So there's a lot of utility in it. That's that's a lot of people that that may have not spent the time studying it under appreciate. So that's great. We've introduced Bitcoin in the global financial landscape. We've touched on some of the characteristics of Bitcoin. How do you see it evolving in the global finance landscape over the next decade or so? Yeah. So there's going to be a lot of hurdles, of course. It's not going to be smooth sailing, but if you look at the overall trend and the overall developments that have been happening, I would say it's more aligned to the positive. So we're heading in the right direction. Of course, along the way there's going to be some hurdles that we will have to overcome from a regulatory point of view. And I think really it's more of an educational issue. People are afraid of what they don't understand, but those who do understand it seem to back it up. And we'll get to this a bit later in the podcast. And that's where you're you're going to come in Harris about the moral aspects of it as well. I'll leave that for next. But I see Bitcoin, you know, growing. It's it's maturing as an asset. And the FUD that we were constantly bombarded with seems to be diminishing, and at least its impact has been. Less impactful, like there's less panic just a few days ago we have the German government unload over 50,000 Bitcoin and you know we hit a negative 25% negative 20% whatever it was and look where we are today. Market has been unfazed yes, and and that would have been a huge event like four years ago that would have people would have freaked out. They would have panicked. They would have, you know, like off Bitcoin is dead, which we've heard like over 1000 times, but we didn't see that this time. Like I don't I don't think I saw any news outlet go out of their way to say Bitcoin crashed 25% in less than two days. So I'm actually very excited. You have political candidates at the elite level in the United States now taking a position on Bitcoin. You know, even in countries where regulation is more strict, Like as soon as the German government, for example, tried to sell their Bitcoin or began selling their Bitcoin, you had MPs actually telling them don't. And they did a present and they invited them to come to a presentation to learn why you shouldn't sell this as because we might have to buy it back later at a much higher price. So, you know, these things, you know, you don't want to be too overly optimistic. Of course, as an investor, you want to be a responsible investor and, you know, gauge how much exposure and volatility you can handle because it's not going to be a direct path to, you know, $1,000,000, but it's going to be volatile along the way. But we've seen that that volatility is diminishing. The panics are diminishing, which means it's maturing and we forget it's been 15 years. Like it's no longer that asset that's been around for five years. 15 years is a lot of time. It's pretty almost a generation and you have the new generation that's coming in that are Bitcoin native. You know, some of the younger folks I speak to, they've never seen an ounce of gold. Like it's of no interest to them, like, but they can talk to you about Bitcoin. So that's, that's kind of where my views are. And you know how I view it down the line. I'm excited. I'm sure you are too, Harris. Yeah. I mean, I think from a certainly from a meaner and Islamic markets perspective, I, I think that there is a huge amount to be achieved in the Middle East financial markets over the next decade or so. Yeah, I think let's there are first of all, there are some yeah, cultural alignments, if I can call it that, in the Middle East. I think that there is a a unique environment, a unique financial landscape in the Middle East, which is different from other regions. And, and that brings new opportunities for for Bitcoin adoption. You know, I think this uniqueness of Middle East markets is defined by, you know, a strong culture of family dominance, you know, merchant families, trading families, a spirit of entrepreneurship, you know, that exists in the Middle East. And I think it's also a commodity based culture, right? So obviously oil and gas is the obvious thing, but I think when you combine that on entrepreneurship, you know, people see it very much as a commodity type of, of of asset. So, you know, this is this is something very interesting because the Middle East has, as I say, unique financial landscape, energy as well, of course, energy sufficient, self-sufficient, you know, that has a huge impact as well. That's something that we'll be touching on as well in our podcast series. So I do think there are a whole host of things that we'll be looking at as a series develops that are specific to the Middle East and Islamic markets. Yeah. And let's let's kick it off. Let's give our viewers a little bit about that. So we've spoken about Bitcoin in general on a global scale, some of the developments there. But at the end of the day, this is a MENA region focused podcast and we want to make sure we tailor the conversation to that. So Harris, I'll flip it over to you. So you mentioned the financial landscape in the Middle East. You mentioned opportunities in the region. Maybe you can develop a little bit about that. What type of financial landscape? Why is it? How is it different than, you know, the West? Let's just say because that is a financial lesson that everyone's familiar to just because it's more prevalent on the news. And what are the opportunities you see in the region in the context of Bitcoin? Yeah. Well, I spent eleven years in the Middle East in the early 2000 between 2000 and one 2012. So that was there at the start of the DIFC, the Dubai International Financial Center. And something that struck me was that Dubai was a very is a very dynamic place. It's one where commercially it moves very, very quickly. And something I find very interesting is where I, where I sit now in the UK and also when I speak to my colleagues in the US, they sometimes bemoan the fact that when it comes to digital assets and crypto and the technology around this and especially Bitcoin, it seems that we're a little bit slow or at least slower in the UK, especially to pick up on the, the fast movement of this industry, the pace of this industry. Whereas when I visit, you know, DIFC or ADGM or, you know, Saudi or Bahrain and people are much more on to this. They're, they're very entrepreneurial to see the potential of this. There are government initiatives in place already Fintech highs, Bahrain Bay, that kind of initiative that's taking place, which is allowing, you know, early stage fintech companies, digital asset companies, crypto companies, Bitcoin related companies to set up and flourish in the Middle East. And the Middle East is a hub. Of course, it's potentially, you know, a billion, maybe even 2 billion within a short plane ride of the center of that region. So as an opportunity for developing Bitcoin related custody services, for example, I think it's a fantastic place to start those. I think the unique financial landscape of the Middle East. I think in terms of the role that, you know, high penetration rate would take place, would would achieve in the Arab world and it's a relationship with the adoption rate of Bitcoin. You know, I think there are some specific issues in the Middle East that that may encourage that adoption. The most obvious one I think is some of the troubles that we see in places like Lebanon and Gaza. So very high inflation, very troubled environments. You know, every now and then we hear some, you know, crazy stories like the person who held up a bank, couple of people held up a bank in Lebanon, you know, demanding their money at at the point of a gun from the bank. Now, normally you would say that that's, you know, that's sort of a criminal activity that should be outlawed. Of course it's a criminal activity. But in this case, it was a case of somebody who's got a family member who's seriously ill, needs a life saving operation, needs the money for that operation, has the money, their own money in the bank and is holding up the bank to get their own money back. So, you know, we have a situation where Fiat money is gate kept by financial institutions all around the world. But in high inflation and hyperinflation environments, in environments where you have trouble accessing a bank for whatever reason, Bitcoin can be a literal lifesaver. So I, I think there are some specific issues around that. There are other issues like it's anti inflation, it's a form of sound money. So culturally it's very attuned to a gold standard. People in the Middle East, Muslims in particular, talk about the Islamic age of the gold dinar for 700 years. And actually a commodity based currency that is scarce, that is finance, that is divisible, that is decentralized, all of these things that we already know is very compatible with that bimetallic currency standard. And then of course, there's a whole sort of Islamic finance aspect to it. So the Middle East is uniquely a, a region where Islamic finance has a big impact on the financial landscape. Now I happen to think that there's a huge intersection between the sort of Islamic Economic model as opposed to the practice of it today and the concept of sound money. So that's something that I want to be touching on as we go forward. Yeah, that's really interesting. I love the how you framed, you know, how the Middle East sits, you know, in the middle between the West and the East. So it is really hub and you know, I've been in Dubai for the last four months, so I'm relatively new here moving from the West in Canada and I can totally relate to what you described about people are so let's just say crypto educated and savvy. Yeah, there is this level of, you know, digitization and I totally agree because when you look at the regulation, the regulatory Moat that's been established here, they are here to promote innovation whether we agree with it or not in terms of the type of, you know, crypto assets that are coming out. But at the end of the day, they are facilitating fintech innovation and this fits right into that. So that was great. Let's take a moment to talk about On Ramp Mino. As a driving force behind the new frontier, On Ramp Mino offers best in class education and advisory services for Bitcoin accumulation strategy in custody. Our expert team specializes in crafting tailored Bitcoin strategies and providing recommendations that ensure your assets are both secure and accessible. Look at consultation with Arnamina today to take the first step towards securing your financial future with Bitcoin. Visit ourwebsite@arnamina.com to learn more and schedule your consultation. And now let's get back to the show. You walked us through the landscape, the opportunities that are there now. We both concur that, you know, the region from a regulatory point of view is supportive of innovation in the digital asset space. But what are your views on Bitcoin specifically it's adoption within the region versus, you know, the penetration rate that you've seen? Because I'm looking at it from a, you know, there is a lot of crypto stuff here, but how do you view bitcoins adoption within the Middle East? Even though we both agree once it clicks, it's going to click and it's going to align well with, like you said, the moral principles, Islamic finance. But currently, as things currently stand, what do you think of it? So I, I think this is something that we'll go on to in a lot more detail a little bit later, not just in this podcast, but in in the future future podcast. But I think very briefly there is a certainly there are a few initiatives, initiative sets up groups that have been set up to disseminate the idea that Bitcoin is the natural successor to a gold standard. And that appeals very much to the Muslim mindset who understands the the allure of sound money and money that is anti inflation and anti Ribbo by definition. So that's something I think that's very powerful argument within the Middle East region. So I can see Bitcoin as, so obviously there is, you know, a certain element of jumping on the crypto bandwagon and you know, every crypto is good and we should have all sorts of crypto and all sorts of digital asset stuff going on. And I, you know, to some extent that's good because it fosters an environment of entrepreneurship. But to some extent it's sort of there's a lot of white noise there. I think what will help Bitcoin stand head and shoulders above the rest of that noise is the fact that it's completely aligned with the concept of sound money. And if we compare it to a bimetallic currency standard, which was, you know, a cornerstone of the development of this and golden age of the Islamic empire, I think that appeals to people on an emotional level. That's why I think ultimately it'll be the one that wins out in the Middle East. Very interesting. Yeah, let. Me. Sorry. No, I totally agree. Go ahead, go ahead. Yeah, I was going to say let's talk about that potential impact and adoption of Bitcoin in the region. Maybe you would want to give us a quick overview of the potential impact on the economies of the Middle East of introducing Bitcoin and multi custody institutions, that kind of thing. Yeah. So I think one hurdle for, you know, getting solid impact, so the regulatory landscape, so right now, unlike for example, you know, the United States, the European Union, there's a bit of fragmentation when it comes to how crypto in general is regulated within the region. So this creates difficulties in terms of, you know, creating a product or a solution that can jump through borders. And you know, in the United States, if Bitcoin is labeled, you know, good thing in general you'll see it go over the entire United States and the European Union regulation is centralized. I mean, I'm not really a fan of centralization, but having a coherent united rule set will definitely affect how Bitcoin or impacts the region. So there are certain countries that are much more friendly to this regulatory approach to digital asset. However, one of the things that you know is slowing, I would say the right type of Bitcoin adoption, which is as a store of value asset as hard money is that currently it's being bucketed under crypto. So it's being regulated at the same level and the same way as other crypto assets versus, you know, in the United States, for example, we can comfortably say it's been labeled a commodity. Yeah. So step one I would say is to kind of push back on that, explain why it's different. It's not a tech stack. It's actually commodity asset. And then the way I view how it would impact and facilitate. So one thing that's common in the Middle East is there's a lot of expatriates, so our population in the Middle East, so I'm from Lebanon, there are more Lebanese outside of Lebanon than there are in Lebanon. And I think that's very common in all Middle Eastern countries where a lot of the local population leaves and you know, they work abroad and then they send money home. So I think Bitcoin using whether the primary layer or more likely the secondary layer, which is the lightning, the payment layer could facilitate remittances and, you know, allow for better capital accumulation because you're not spending such a huge percentage on sending money or receiving money from abroad. The second point is, as you touched on, it's kind of like a metallic asset. So we as Middle Eastern or people from the region, we we have an affinity for this type of asset. We like to own these type of assets. So we're huge on real estate, on commodities. It's just second nature to us. That's that's what we're taught as we are growing up like property and you know solid assets like gold, you should own that. So I think as a store of value asset, it would work out well. And I think how it could impact, it could impact how the the government's, you know, if they really, you know, decide to take a positive lens on Bitcoin, they can integrate it into their energy industry, which is huge, as you know, in the East, not just from an oil and gas point of view, but the level of solar irradiance that's available here is almost 365 days a year all the time. So if you can plug in Bitcoin miners, work with private Bitcoin miners or even, you know, have the government be involved, you can provide energy access to everyone within the region at a relatively cheap cost. So I think from a social point of view, it can also facilitate that and can subsidized the goal of the region to diversify their economy away from energy, oil, fossil fuel energy, oil and gas and to other industries. So not only will it, you know, help with, you know, the flow of money internally, externally, but it will also allow the economies here to leverage what they have, you know, some oil and gas to better their societies and to diversify their economies away from, you know, being so focused on one specific sector. And not only will it also open up the cultural side as well, because Bitcoiners, they love to visit places where they can use Bitcoin. Like you see it all over, like every Bitcoiner wants to go to El Salvador, for example, to Madeira just to spend his Bitcoin. Now, some people say don't spend your Bitcoin, but that is also a touristically appealing proposition. And in the region, you know, countries like Dubai for, well, the UAE is really big on tourism. Lebanon, almost half of its GDP relies on tourism. So, you know, you can really propel that by having, you know, individuals come in, spend money. So that's how I see, you know, Bitcoin impacting it. And also you look at the central banks here, they've been accumulating gold as reserve assets. And there are certain tensions between the Middle East and the West. And we've seen, you know, between also the the Russia Ukraine war, what's happening in Gaza, there is tension. And so you feel like they're accumulating gold potentially just, you know, as a hedge in case there's a weaponization of the US dollar, which we've seen can happen. So governments may view it as a hedge, may adopt it as a reserve asset and that way they have more security. So that that's how I view its impact. Fantastic. Yeah, I, I, I think there is a huge potential from an energy point of view, you know, from a financial institution point of view in a way we clearly there are great, there's great potential in the Middle East for adoption and the impact of Bitcoin. But I, I personally have an interest in the Islamic finance aspects of Bitcoin and you know, the importance of Bitcoin in that field, which I think is a, a huge unaddressed area and one that I, I'm personally, you know, very, very interested in. And I think that Bitcoin aligns with the principles of the Islamic Economic model. So, you know, it's sound money. Sound money is a fundamental principle of Islamic finance that is not followed today because Islamic finance is based on Fiat money. So it's it's on a fundamentally. Shaky basis the foundations of shaky for the current modern Islamic finance industry. Whereas, you know, we once had 700 years of the Islamic gold dinar, which created a civilization that was, you know, scientifically advanced compared to other neighboring civilizations. You know, it was a time for development of, of mathematics and astronomy and science and culture and travel and business, the Silk Route, you know, imported ideas, not just commodities, not just goods and services, but ideas into Southern Europe. And you know, we talk about, you know, Venice perhaps being the start of the European, you know, banking model and entrepreneurship. But actually many of the ideas were imported into Southern Italy and beyond because of the that silk group trade. So the prophetic tradition of trade is something that is really, really interesting because it's real economy and it's low time preference. Now what if you had a a form of money that was anti riba? Riba, of course is interest. It's banned in Islam. You can't make money out of money. And Bitcoin has this unique property of proof of work. So it is something that cannot simply be magicked out of thin air. Whenever a bank lends money, it is creating money from nothing. Credit itself is an act of money creation. Every time the bank makes a loan, it's creating new money. And then of course, it's fundamentally effectively a type of river, a type of excess or surplus. So what I think is there's a, there is a unique and natural alignment between Islamic finance or the economic model and Bitcoin sound money. It's very similar to the gold standard and I think that leads to a low time preference. Yeah, please go ahead. Yeah, very interesting. So maybe let's take it back a notch and maybe you can walk us through for the viewers that may be watching that may not be familiar, maybe walk us through the key Sharia principles and then maybe show us or explain to us how Bitcoin aligns with those principles and what makes it attractive as an asset for Muslims all over the world. Yeah. Well, you know, a lot of people say, you know, what is Islamic finance? And then they say, well, it's a banking without interest. Riba is interest, and that's kind of correct. But also it's kind of reductive, actually. That's an outcome of the fundamental principles. The principles really are finance is just a tool. It's a servant to the real economy. It's there to lubricate the wheels of the real economy, not to be the master itself, which is what's happened in the modern economic system. So finance is there to finance the real economy. That's real goods and services and it needs to be risk sharing. Risk needs to be apportioned between the parties. So you don't have a borrower lender relationship. Actually what you have are two partners working together as Co finances of a business or a venture. So the prophetic tradition is the caravans leave the city gate. They carry tech, textiles and spices and other commodities. They trade them in another city, they return, and then the profits are shared between the financier, the rubble maul, the owner of the capital, and the mudare, the manager of the money. It's a pure venture capital model where profits and losses are shared between partners. And that's essentially the basis of the Islamic Economic model. What do we have today when we have a banking system that is fractional reserve where a bank takes in deposits but lends out more money than it has in deposits, so it's created new money in the process. Now, if you overlay on top of that halal contracts, Sharia compliant contracts, and you know, you can assign all sorts of, you know, similar sounding Arabic words, Musharraf and Mudaraba moralbaha. You know, at some point you have to take a step back and you say, well, wait a minute, these are halal contracts overlaid on top of a system, which is money creation. How can that be Sharia compliant? And in the past, I've I've described the phrase Islamic banking as an oxymoron. It doesn't make sense. You can't be Islamic and banking, you can't create money from nothing and just overlay Sharia compliant contracts on top of it. So actually the model of the Islamic Economic model is one that is real economy and it is profit sharing and money is just a medium of exchange. It's not something to be created and traded like a commodity. So I think that's that's the real thing, you know, traditional finance, traditional Islamic banks, what they've done is they've reversed engineered conventional Fiat based debt and that's a mistake in my opinion. I think what they should have done is looked at the subject from first principles. This is what I'm doing in my day-to-day life. The company that I run creates as I say listed profit sharing notes that finance trade in the real economy. That's the basis on which it works. I think the ideal marriage would be that type of financing with a sound money system, and that's what I think I want to be working towards. So interesting. So you're saying at the foundation the system needs to be reworked or readjusted to have at layer one as we speak in Bitcoin terms a hard asset on top of which all Islamic finance product are built on. So what are the potentials right now to have a Sharia compliance, you know, Bitcoin product like how do you perceive that? If you can share that would be great. Yeah, I, I this is a very tough question because the Islamic banking industry doesn't want to go down this route. It's happy where it is. It's happy reverse engineering conventional debt products with a halal overlay. And you know, in in some parts of the world it's successful in places like Malaysia and parts of the Middle East. In some parts of the world it's not so successful. So in the UK for example, there is only a 2% penetration rate of all Muslim households who have an Islamic bank account or an Islamic mortgage, which is amazing really when you think about it because there are only effectively 2 Islamic banks in the UK. So they effectively have a monopoly position. And Muslims know the heinousness of the sin of river of interest. It it ranks alongside the most, the the worst sins. And yet, you know, most Muslims in the UK will have a conventional bank account and conventional financing. And I think the reason for that is because the industry has not really attempted to look at this from first principles. It did about 60 years ago when the first experiments were taking place. So we had the the Mitt Rama experiment, which I've talked about in the past, which is effectively an economist in, in Egypt who set up a social Savings Bank that took in deposit money from investors, invested that in local industries and shared the profits with those depositors. So that's a pure Madonna, but that's a pure investment management agreement investment relationship. They're partners in that transaction, right? It's not an asymmetric relationship where you have a borrower and a lender. So this fundamental prophetic tradition of trade has not been implemented in a modern financial instrument. That is what I'm personally working towards. And and as I say, once you have these profit sharing structures based on pure Madaraba and pure Wakala and pure Musharraqa, these are risk sharing relationships. Once you attach a sound money basis to that, as I say, you've got the perfect define marriage. I think there are some challenges here. You know, I think the challenges are that we need to, we need to get scholars to buy into this, we need to get top down approval for some of these these initiatives and we need to get bottom up usage. So that's something that I think will happen in time. Those are steps to integrate within Tranfi. As far as the top down initiatives are concerned, you know, I think a lot of good work is being done. You know, I'm, I'm glad you guys are set up in Dubai. I think there are other places in the Middle East that have a great attitude to this. You know, there are government initiatives in place to to encourage the development of, you know, for example, a multi custody institution like yourself. In terms of a bottom up approach, there's a lot of awareness, there's a lot of education. People are literate about crypto and digital assets in the Middle East. You know, there is some essential life saving usage. I have made donations to Gaza for humanitarian aid that wouldn't have got in through the traditional banking channels. They've only been able to get in through Bitcoin channels. You know, that's, that's money that can literally be used to save lives in Lebanon. It is being used to combat hyperinflation. You know, these are real use cases, bottom up usage of, of adoption by the people. And then finally the scholars. I think that's a really interesting and important, you know, area to address. Traditionally, in the past, we've seen many scholars who have been misinformed not only on Bitcoin, but also on simple matters related to the global financial landscape, the monetary system. They simply don't understand how it works. So they delivered these opinions, these legal opinions, fatwas, let's say Bitcoin is Haram. It's impermissible on the basis of, frankly, ignorance of how things work. First of all, what is Bitcoin? How does it work? Why is it like gold? Gold is Islamic by metallic currency, is Islamic as a form of money. Why can gold not be? It has many characteristics and more. And you know, why do we think governments only have the right to issue money? They don't. That's never historically been the case in Islam. There's always been a separation between state and the judiciary and state and money. There's no reason why we can't do that again. So this is a really important point to get scholars on side. We're beginning to see the emergence of young, dynamic, very highly trained scholars who understand not only fickle MO amolot, which is the jurisprudence of transactions in Sharia law. So they're highly trained lawyers in that sense, but also well understand modern financial instruments and the modern economic system. So when you put the two together, they're able to take a look at Bitcoin and say, wait, this is the most Sharia compliant form of money ever invented. And that's what I believe as well. So. With regards to the scholars, if you were to take a snapshot on, you know, the average view towards Bitcoin, is that something that you can pinpoint right now as we currently, as things currently stand and what direction are we heading towards? Yeah, We have a diversity of opinion from one end of the spectrum to the other. So we've had those sort of traditional well known names who are not necessarily experts in economics or finance. Many of them are very active on social media. They have in the past, and I'm talking several years ago, made comments or delivered legal opinions saying Bitcoin is Haram. And then they've issued a series of FUD, fear, uncertainty and doubt. The propaganda that we see saying, oh, Bitcoin is gambling, Bitcoin is volatile, Bitcoin is this, Bitcoin is that, all of which can easily be rebutted. It is a very simple argument and we're going to do that in this series. We're going to say why each of these arguments is to be rebutted, right? But at the other end of the scale, as I say, we've got this young dynamic scholars who are at the cutting edge of the industry. They're deeply involved in digital asset companies, especially Bitcoin, and they well understand it. And they said, no, it's perfectly halal and it's usage determines whether it's harm or not, right? It's the usage which determines whether if you, if you use a gun or drive a car, you know, if you drive a car over the speed limit and break the red light, obviously it's that usage is Haram. It's a sin, right? But if you drive it within the law, then that's not a sin. That's a useful thing to use. I think what we're seeing is a move in that direction. We're starting to see scholars coming round and we're seeing some very big name scholars, some very well known brand name Sharia scholars well known around the world who are beginning to sit back and say, wait, I didn't know very much about Bitcoin before. But I'm starting to, you know, read articles and see things about this and I'm consulting people in the industry and I'm beginning to see that actually there's something very unique and interesting and potentially very Sharia compliant about this form of money. And they're starting to come round to it. And I'm pretty sure, inshallah, God willing, that they will come round to it because I'm a firm believer that, as I say, it's the most systemic form of money ever invented. So part of what I'd like to do is to sit with those guys and, and persuade them. I actually think, I think this is something you really ought to look at and you really ought to promote because it's good for society, it's good for humanity. Challa challa and inshallah we'll have them on this show sometime soon and we can have a, you know, productive conversation and get their live views on the matter. Anything else Harris we want to touch on? I mean, we're almost at the one hour mark and you know, this is episode one of our show. I think we've covered a variety of topics, you know, in general, Bitcoin on a global scale, and then we went deeper and more focused on the MENA region and then we touched on Islamic finance, you know, how things are going within that space, what we can expect in the future. Anything else we want to touch on before we wrap this up? No, I think we very deliberately kept it sort of light touch. I don't think we, we want to give viewers a chance to think about some of the themes that we've mentioned and fund is a very important theme, you know, fear, uncertainty and doubt. You know, there are a lot of issues that I think are, as I say, unique to the Middle East. Energy is one of those things, you know, what's the energy usage of Bitcoin and is that a, is that environmentally unsustainable? I hope what we're going to do is argue that it's very sustainable. Actually, there are very good reasons with strong empirical evidence as to why Bitcoin could be good for the environment, and that's something I hope that we're able to touch on a little bit later. There's many themes around Islamic finance, around the Middle East market, market in in particular, that I think we're going to spend much more time on over the coming weeks. Yeah. So we're not just going to talk about macroeconomics, we're also going to talk about Islamic finance, social aspect of Bitcoin, the game theory of Bitcoin. I'm going to talk about, you know, the variety of infrastructures is coming about. And, you know, on the topic of energy, actually a few weeks ago we released a paper regarding Bitcoin and the energy revolution, which has a, you know, tailor made approach specific to the Middle East within it. We'll be sure to put it in the description below. But yeah, really looking forward for the next episode. Harris, this was great and you know you and I will be meeting with a bunch of people hopefully in the near future, bringing high value content and high signal content to our viewers, just for the audience. Just make sure if you like this content, make sure to follow us on LinkedIn, Twitter, YouTube, Spotify, every possible podcast platform. Everything will be in the description below and we'll see you soon. Thank you so much. Cheers. Thanks for listening. If you found the content valuable, please make sure to share with a friend and subscribe on your favorite podcast platform. Before we finish, a quick reminder that the content provided is for informational and entertainment purposes only, and nothing should be construed as investment or legal advice. Regardless of where you are. On your Bitcoin journey, we'd love to hear from you. Visit Onrap Mina com Schedule a consultation.