No One Has Ever Attempted to Redesign Cash Waqf Like This Before
Despite the contrary belief, buildings and plots of land are not the only acceptable forms of Waqf. Over time, Cash Waqf has also become one of the acceptable methods of contribution towards Waqf.
The emergence of this financing instrument has solved issues of liquidity and mismanagement of Waqf assets. Cash Waqf provides the funds needed to revitalise Waqf properties, whether for religious, education, medical, social or other forms which benefits society.
Compared to Sadaqah, Waqf is meant to be perpetual, thus possessing an element of permanence. It is for this reason that much debate has taken place regarding the acceptability of cash as a form of Waqf since it can be consumed immediately. Hence, the permanent quality does not exist. This same also applies to food and drinks, and likewise clothing. But this is not always the case. If Cash Waqf is used for initiatives that provide everlasting benefits, then it is considered as a form of Waqf.
History of Cash Waqf
Cash Waqf can be tracked all the way to the time of the Sahaba, when Hafsah (may Allah be pleased with her), one of the Prophet’s (SAW) wives, dedicated jewellery, valued at 20,000 dirhams, for the Al-Khattab women. Although, technically jewellery is not cash, it is permissible because both cash and jewelleries are derived from the same source, either gold or silver. In the second Hijri century, Imam al-Zuhri was the first person to give Fatwa (legal opinion given by an Islamic scholar) on using dinar and dirham to fund public facilities and education for the greater good of Muslim communities. Shafi‘is allowed a variety of Waqf assets, movable and immovable, if the original value of Waqf does not lose its value because of its consumption.
The Lack of Transparency
Although, Cash Waqf has been lauded for solving liquidity issues and helping in the revival of Waqf assets like buildings, the issue of transparency and traceability remains. For instance, if in a mosque, Cash Waqf is collected to be used for the renovation of an orphanage, the donors still won’t know if their money has been in fact used for its intended purpose. A fundamental problem in most charities is to achieve better transparency in where the donations are going, from the act of giving to the realisation of its benefits.
So what’s the solution?
In recent months, a solution to solve the issue of transparency has been developed. This solution is called WAQF Chain. Essentially, it is a platform that uses blockchain technology to iron out the wrinkles in today’s Waqf system. The GALLACTIC Blockchain promises digital security, accountability and transparency across its ecosystem. This is possible because, in a blockchain, when a transaction is approved through a consensus mechanism, it is committed to all ledgers in the network. The ledgers are distributed databases that save information recorded from a transaction. In addition to reducing transaction costs and providing safety for data, blockchain can keep a fully verifiable and immutable database layer of trust and transparency that is not always available within the iFinTech (Islamic FinTech) sector. For a lot of donors, the lack of visibility on third parties are one of their main concerns especially before they donate, or even once they have donated. By using smart contracts that validate the agreed terms and conditions, discrepancies are sorted out immediately. With more companies embracing this technology, transactions will run smoothly, and the technology will be more widely adopted. By providing this blockchain-based solution, Finterra has designed the world’s largest Waqf financing platform and made it available to the general public.
