Digiwaqf, a blockchain-based cash Waqf platform, is set to launch in November this year, ISFI has learned. Following the launch, the endowment platform will also see its first institutional buy-ins, which will be from energy producers in the GCC.
The platform, licensed out of Labuan IBFC and headquartered in Dubai, will act as an intermediary between sources of funds and entrepreneurs, with Digiwaqf issuing grants and interest-free loans to approved projects on the platform. It allows entrepreneurs to upload projects and vote on other peer projects. At launch in mid-November, the team expects to have around 15 approved projects.
“The platform raises Waqf funds, which are then invested in Shariah compliant instruments, the proceeds from which will be channeled toward issuing grants for Islamic tech entrepreneurs,” Renat Edikhanov, CEO of Digiwaqf, told ISFI.
The Shariah compliant investments will comprise liquid short-term instruments and long-term investments. The liquid investments will include Sukuk, Islamic shares and money market instruments while the long-term portfolio will constitute Islamic venture capital investments.
Renat, who was also part of the Moscow-based PayZakat project, likened Digiwaqf’s model to a private equity fund that does not need to return the investment proceeds to its investors as they are distributed as cash Waqf contributions.
Currently, Digiwaqf has two practitioners on its Shariah compliance team, namely Mufti Ismail Desai and Mufti Muhammad Abu-Baker.
According to the Digiwaqf team, they are currently in talks with two institutional contributors. The first institution is a known oil company from Saudi Arabia with a number of venture capital allocation funds while the second institutional contributor is an energy company based in Abu Dhabi with a focus on hydrogen.
The contributions from the two institutions will chiefly contribute to achieving the governments’ sustainability goals of the respective countries. Renat expects these contributions to be officially penned and announced in December this year.
“In about six months from December, we will be able to issue our first grants,” Renat estimated.
While currently the majority of the projects on the platform are from the GCC, Renat expects Malaysian and Indonesian projects to have the bigger share of the pie in a year’s time. This is due to Southeast Asian Muslims being more active in terms of tech-based endeavors.
Also in the pipeline is the transition of the platform toward a decentralized finance, or ‘DeFi,’ model to better serve its user base. Its current focus on the technological front is to develop smart contract functionality utilizing Solidity on the Ethereum blockchain.