Pakistan’s State Bank has been a pioneer in recognizing the importance of financial inclusion in the country. Despite various efforts, the World Bank’s Findex data reveals that the ratio of Pakistani adults with formal bank accounts remains stagnant at around 21%, barely changed from 10.3% in 2011.
To address this issue and explore a potential solution, a Shariah-compliant blockchain called HAQQ is being considered.
The financial inclusion situation in Pakistan is dire, with over half of the population lacking access to any financial services. While the country boasts 194 million mobile users, only 37 million have a mobile wallet account, and only 19 million accounts are active. The mutual distrust between the population and conventional financial institutions is a significant barrier, with poverty, lack of documentation, and a lack of transparency contributing to the issue.
A potential solution lies in the HAQQ blockchain, designed to create a Shariah-compliant and transparent financial ecosystem. HAQQ is an application-specific blockchain built on the Cosmos SDK, with features such as scalability, low transaction costs, and operational streamlining. It is compatible with EVM-native software, allowing the deployment of smart contracts written for Ethereum or other EVM-compatible networks without code changes.
HAQQ also supports the Inter-Blockchain Communication Protocol (IBC), enabling permissionless cross-chain communication with other participants in the Cosmos ecosystem. Additionally, the upcoming Shariah Oracle feature, to be implemented in Q3 2023, will rank smart contracts based on technical security and religious compliance, ensuring compliance with Shariah law.
The introduction of HAQQ and its Islamic Coin token offers promising potential for better financial inclusion in Pakistan. By blending technology with tradition and focusing on marginalized communities, initiatives like HAQQ aim to create a fair and sustainable digital future, empowering those who need it most.