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The investigation of the validity of dealing with OGC and its compliance

with Shariah rulings prompt us to address the following issues:

o Introduction

o The nature and attributes of the OGC.

o Maqasid al-Shariah framework as to the emergence of OneGram

Cryptocurrency

o The process of purchasing gold and its redeemability to OGC.

o Governance aspects.

o Sharia requirements.
1. Introduction
This product consists of three sections and previously accustomed products. Notwithstanding

that, altogether i.e., its current complex structure would lay a foundation to a new issue of

which it requires a due consideration and diligent Shariah supervision. This system

encompasses:

1. A new currency of a kind of cryptocurrencies.

2. Trading gold in a new, specific and particular procedure.

3. Fin-tech. This kind of (technologies) is considered to be one of the disruptive

innovations and boosters of financial industry changes.

The Shariah consideration pertains to all phases of this product of which it could be divided

into three:

1. The stage of issuing the OGC by first purchasing and storing gold and then redeeming the

customer's ownership to an electronic currency backed by gold.

2. Trading OGC through converting, selling and purchasing it along with its affiliated

instruments such as the applications and prepaid debit card.

3. Investing in this currency.

A fourth potential future consideration to be taken into account is:

4. Issuing (developing) products through this currency for special purposes.


2. The nature and attributes of the OGC

From Shariah point of view, this product could be considered as a currency for two major
reasons:

1) It is backed by gold.
2) It is a reliable measure of value, medium of exchange and means of discharge. In this
respect, Imam Malik said as reported in the Mudawana (3/5): and if people comes
to agreement to use leather as a medium of exchange among them and mint it I
would disapprove (disfavour) of selling it in exchange of gold and silver on deferred
basis.
It is worth noting here that the primary presumption pursuant to which we are conducting
this analysis is the compliance to Shariah.

To pave the way towards a more stable, sustainable and just monetary system we have to
think from a holistic perspective that overcomes the dominant paradigm regarding money
and monetary system whose with the passage of time becomes a kind of topics that we
cannot question and object to it. Therefore, a radical solution has to be laid down to create
an atmosphere of prosperity.
3. Maqasid al-Shariah framework as to the emergence of OneGram Cryptocurrency

After the last global financial crisis, the question of sustainability, stability and prosperity of
the current monetary system arises again. However, most of the discussions among
politicians, economists, governments and academicians give impression as this is the first
economic and financial crisis faced by humanity. Moreover, even when economists compare
this crisis with the former crises they highlight only the differences among them whereas
they never ever mention or try to understand what is the structural common causes to all
these financial crises. Therefore, some prominent financial experts around the world have
clearly identified what is the systemic cause to all these crises and suggest radical or
structural solutions like crypto currency system which aim to open the door for more
innovative payment systems and investment avenues mainly through redefining money or
rethinking money.

People at different social scales across the globe no longer have confidence on the ability of
governments and great business leaders to resolve problems pertaining to the current
monetary system which manifests itself through the recurrent economic and financial crises.
International Monetary Fund (IMF) has identified since 1970 (1):

- 145 banking crises.


- 208 monetary crashes.
- 72 sovereign debt crises.
- This adds to an astounding total of 425 systemic crises: an average of more than ten
(10) countries in crisis each and every year.
- Adding to that 48 massive meltdowns between 1637 and 1929

Therefore, we are dealing with a systemic problem inherent in the current monetary system
that never can be resolved with the traditional policies (fiscal policy and monetary policy).
Consequently, we need radical solutions that start firstly with questioning the paradigm of
money which some well known financial and economist experts wonder why decision
makers never turn their attention to this conceptual point which they believe that it is at the
root of all these recurrent crises. That is why they are calling towards rethinking the current
concept of money which in their opinion was invented in a very different era with a
different view pertaining to the creation of wealth and another set of priorities and
challenges than we have today [some of them shed light on the inconvenience of the
current single currency system]. This can be clearly seen in the book of Bernard Lietaer
"Rethinking money" where he says: our current monetary system was designed some 300
years ago, during an era that knew nothing of natural limits and had a completely different
set of objectives and priorities. It is tool that should be serving us rather than being our
master. And since it is a man-made construct it can be re-thought, re-imagined, and
redesigned"(2).

These experts assert that the actual interest based fiat monetary system with its main
features which are: fiat money, fractional reserve banking and interest rate lie at the bottom
of the instability that distinguishes our contemporary juncture. In addition, they fiercely
criticized the monopoly of money (the fact that we are using one single currency) and its
creation process as well arguing that because we have a monoculture of money; in other
words because we are using one type of money that is the valuable reason why the
monetary system is unstable. Furthermore, they claim that there is scientific proof, peer
review proof in five different articles that monetary monoculture causes the structural
instability.1

The structural problem:

To deeply understand the systemic problem of the dominant monetary system, some
conceptual questions with respect to money and monetary system have to be asked so that
we can frame our analysis.

The first question that must be asked is: who create money and how is it created? The
overwhelming majority of people across the globe believe that money is created by the
government, but the truth is something else. Today, money takes the form of bank credit
that must be borrowed into circulation. (5) This question and this fact prompt us to clarify the
process of money creation. To further illustrate this process and its effect on the economy
we use the equation of exchange: M x V = P x Y where:

M: is the money supply.

V: is the velocity of circulation of money.

P: is the general price level.

Y: is the aggregate production in terms of goods and services.

After the money being deposited in banks, the money supply increases through multiple
deposit creation, therefore M increases, and if there were no corresponding rise in the real
economy (goods and services) the general price level will tend to go up, consequently the
inflation will take place in the economy. Moreover, this money created out of thin air enters
the economy in the form of debt (that is why the nowadays money is well known as:
conventional bank debt money) hence banks charge interest on it. This latter has many
negative effects on the economy that can be grouped under these three headings (6):

- Interest requires endless economic growth even when actual standards of living
remain constant.
- Interest encourages competition among the participants in the economy rather than
cooperation.
- Interest concentrates wealth in the hands of minority by taxing the majority.

The striking deduction derived from demanding interest on this debt money is that total
debt which is debt plus the interest is not repayable in aggregate due to the fact that the
interest requirement needed to service the debt that does not exist in the form of money
yet, i.e., the default in the current monetary system is by design.

To illustrate, due to the lack of money in circulation in the system in aggregate, individuals
and firms will suffer the shortage of money in the economy, and hence prompt them to
compete stiffly to repay their debt. Some may succeed but others are sure to default.
Moreover, the way in which the financial institutions deal with the default leads to worsen
further the situation. In the case of default, banks choose either to reschedule the debt
which in turn leads to create more money through the same process or confiscating real
wealth of the defaulters and thus transferring wealth to them. That is why they say that
wealth tends to concentrate in the hands of a minority by taxing the majority. Therefore, the
mere sustainability of the dominant monetary system requires more and more money to
be created which gets into the economy as debt. Hence, to just keep the stability of the
general price level there needs to be a continuous increase in the real output (Y), i.e., the
stability of the standard of living necessitates endless economic growth. this reality is
better summarized by Thomas Greco in his famous book the end of money and the future
of civilization where he said the way in which money is created by the banking system
today causes a debt imperative this forces destructive competition for the available
supply of money, which is never sufficient to enable all debtors to pay what they owe. (7)

The second question is: how is the monopoly enforced? In other words, how the national
currencies are only being used as medium of exchange? As economics professor L. Randall
Wray writes, in all modern economies the government defines money by choosing what it
will accept in the payment of taxes. Once it has required that the citizens must pay taxes in
the form of particular money (for example dollar), the citizens must obtain that money to
pay taxes. In order to obtain that which is necessary to pay taxes, or money, they offer labor
services or produced goods to the government (as well as to markets). This means the
government could buy anything that is for sale for dollars merely by issuing dollars 8.
Therefore, the primary aim or the systemic purpose of taxes is to give value to the national
currency. Furthermore, the creation of money is monopolized by the banking system under
the supervision of the central bank which emphasizes increasingly a monoculture in money.

The third conceptual question regards the definition of money: what is money? All
economics books with any language in any country over the world define money as a
medium of exchange, unit of account and a store of value.

This definition is a functional definition as it were, In other words this is what money does
and is not what money is. Redefining money in the right way or understanding what really
money is or creating a new paradigm with regard to money will enable us to think on a
larger scale to find structural solutions (such as crypto currency system) rather than
restricting our mental forces in thinking inside the box iterating the same methods that have
clearly been showing their failure in creating a just, stable and sustainable monetary system.

In addition to what have been said before, this debt money created through multiple
deposit creation will be destructed in the reverse way of money creation. The source of the
problem lies mainly in the continuous growing of money supply while the real sector is
limited to maximum short range level called in economics potential GDP. After reaching that
point in economy there is no way to increase the GDP in the short run. Accordingly, an
imbalance between the monetary side of an economy and its real sector will increasingly
grow as the time is running out. This excess of money supply will be absorbed mostly in non-
productive sectors particularly in properties and stock markets, especially at this juncture of
an economy where the interest rate is at lower level and thus encouraging people to borrow
money and investing particularly in shares and properties which lead to drive up the share
prices and property prices to some extent exceeding what is fundamentally accepted in the
theory of finance. Hence, the asset price bubbles commence. Due to the high demand in the
stock and property markets, stock prices and property prices will reach an absurd peak and
thus high price earnings ratio (P/E) will prevail in the market.(9) At that point, investors tend
to reevaluate their holdings and adjust their portfolios through selling or liquidating some of
their shareholdings. Accordingly, the price of shares decline drastically and the economic
downturn set in. Afterwards, a big problem will arise. People who have entered the stock
market just before the avalanche of stock prices may find themselves in a position which can
be challenged. That problematic position is mainly due to the fact that the net worth of their
investment fails below the loan principle that they had taken to finance their share purchase
earlier.10 This prompts banks to confiscate real wealth of the non-performing loan (NPL)
which was taken as collaterals, and more than that, they oblige them to pay the difference
which can be past savings or even future income. The failure in the debt repayment has
negative effects and implications for the financial sector as banks must adjust their capital
adequacy ratio due to the above circumstances. In such situations banks may precipitate the
repayment of other loans which some of them perhaps are not ready to repay or even on
the about to become non-performing loans (NPLs). Consequently, the financial sector will
observe a contraction of money supply. At this juncture, firms tend to restructure their
activities just to push down their costs in order to save cash flows to service the debt. The
most popular way in doing so is laying off workers. This is exactly the phase where the crisis
moves from the financial sector to the real sector. As firms retrench workers, the
unemployment rate will go up which in turn drives down the aggregate demand causing a
shrink in economic activity which leads to a recession. This phenomenon of money
destruction prompt us to ask ourselves: are these cyclical crises a phenomenon inherent in
the economy or something caused by inherent shortcomings in the dominant monetary
system? After this illustration, we can respond or at least discuss what included in many
economics books that the economy suffers from inherent instability which causes the
macroeconomic variables to fluctuate.

Crypto currency as one of the prospective systemic solutions:

It is worth noting here that the primary presumption pursuant to which we are conducting
this analysis is the compliance to Shariah.

To pave the way towards a more stable, sustainable and just monetary system we have to
think from a holistic perspective that overcomes the dominant paradigm regarding money
and monetary system whose with the passage of time becomes a kind of topics that we
cannot question and object to it. Therefore, a radical solution has to be laid down to create
an atmosphere of prosperity.

The first step in achieving the aforesaid target is to redefine money. More often than not,
money is commonly perceived from its material representations. However, the fact that
human kind had relied on several different types or forms of money throughout the history
induces us to change the way we look at money and to think of money differently or to
correct our understanding with respect to what money really represents. An intuitive
question arises here: what prompted people through history to transact with each other
with a specific form of money?

- Is it by law?
- Common agreement?
- Custom?
- Religious beliefs?
- Taxes?
-

This is precisely the corner stone of the new definition of money which is: an agreement
within a community to use something standardized as medium of exchange. (11) This
definition is primarily related to complementary currencies. However, systems that tend to
back their currency with gold as is the case of OneGram Crypto currency take advantage of
gold being an effective and reliable store of value.

Based on this definition we highlight the first main difference between the conventional
money and the crypto currency system. While the conventional money is legal tender
(accepted in payment of taxes) the crypto currency is common tender money.

Crypto currencies refer mainly to the fact that they are designed to work in tandem with
national currencies and not as alternatives to them (with the condition to adhere to
Islamic law requirements) since there is a strong need to diversity in the monetary system
as we will explain it later on.

Recently, a team of researchers in the United States was working on measuring what makes
an economic system stable and sustainable. Inspired by the complex flow networks either
natural or human, they set two criteria in doing so:

1- Efficiency.
2- Resilience.

The rationale behind relating economic systems to natural and human complex flow
networks is that economic system is similar to each complex flow networks in terms of the
importance of the sufficient flow of the vital substance. In other words, in each complex flow
networks process there is a vital substance that enables all the system or the chain to
function efficiently and in resilience: blood to body, biomass to an ecosystem and money to
the economy. Hence, money constitutes to the real economy what blood is to human
body. The circular flow of income is well known in economics where money circulates
among economic agents flowing from one to another, output of one business serves as
inputs to another one or to a final consumer in a wide network that enables the circulation
of different categories of resources and energy around the world. Accordingly, the analogy
is: as the lack of blood in human body results in serious health complications which could
end with death, and as the non-sufficient energy flow into planet could lead to
environmental disruptions especially in the food chain, the lack or the shortage or the
scarcity of money in the system will cause major disruptions in the structure of the
economy which manifests itself through financial and economic crises. Consequently,
money must be kept circulating in sufficiency throughout the entire system as it allows:

- Well allocation of resources.


- Enables the whole system to function in a way that is beneficial to humanity.

The crypto currency system gives us this opportunity through some characteristics that will
be discussed through the paper.

The most striking finding of the research grants us a valuable insight in the way to establish a
stable and sustainable monetary system as well as support the idea of implementing crypto
currency system. This idea is: the sustainability of the monetary system for long term
requires not only to be efficiently organized but also capable to adjust and adapt
(resilience) to its environment, particularly in the phase of crises and downturns. This is
exactly what is needed: a monetary system that is structurally diversified in terms of
media of exchange and that is what crypto currency systems offer to us.

On the social level, it opens the door to charity and thus enhancing the corporate social
responsibility.

Be that as it may, the OneGram crypto currency could provide an avenue for a systemic
solution for the current inherently unstable fiat monetary system. The features and
foundations of such a system could be compiled in the following points:

1. Redeemability. OneGram crypto currency is backed by gold on one to one basis. Gold
is deemed to be a reliable store of value, has an intrinsic value, it is kind of tangible
asset and durable and this is at odds with the fiat money. Differently stated, it is a
kind of real money. In this regard, some economists and Shariah scholars set the key
properties of money from Islamic perspective and they summarized them as follows
(10):

1) Money is either precious metals or food.


2) Money is abundant and widely available.
3) Money is durable and does not spoil or corrode.
4) Money has intrinsic value.
5) Money exists in creation and is made valuable by God.
6) Money functions as a medium of exchange.

2. Shari'ah Compliant. This central feature could be fulfilled via considering the
following requirements:

1) Prohibiting interest, which is the source of unjustifiable income. As to OG


there is no interest mechanism in its issuance.
2) Prohibiting transactions that are uncertain and excessively speculative. There
is minimal speculation as OG is an asset backed by physical gold.
3) Prohibiting Gambling.
4) Prohibiting the involvement in non-permissible activities which definitely
result in non-Halal income.
5) Encouraging profit and loss sharing based on the partners capital, risks share
and effort.

These requirements are expressly stated that they are observed in the design of the OGC.

OG complies with the Shariah Gold Standard [issued by the Accounting and Auditing
Organization for Islamic Financial Institutions]. So you can feel safe knowing that your
investment will respect your values as well as providing you with financial growth
(deducted from the whitepaper of the OGC)

3. Digitally managed and electronically settled system.

In point of fact, a lot of scholars are proclaiming that these attributes should be the
principal features of money in this modern technological juncture.
4. It represents an investment avenue and payment system as well.

The investment procedure should be illustrated more to insure transparency in the OGC
system.

5. It is efficiently priced with netting off system established between the gold value
and the demand premium which ultimately ensures stability and thus increases the
investors confidence.
No currency can guarantee absolute stability, but OneGram limits your exposure
to the downside risk. Since the base price of OneGram is always at least equal to
the spot price of gold, OneGram has a floor price.
Whats more is that usage and market demand also adds a premium to the value of
OneGram. Therefore, OneGram has a three-part valuation system to determine its
market price.
The first part is the Gold Value (GV), with the value being determined by the spot
price of gold.
The second part is the present value of the transaction fees reinvested to buy more
gold (TF), with the value being determined by the usage of OGC.
The last part is the Demand Premium (DP), with the value being determined by
market demand.
This creates the following formula for the market price: OneGram Value = GV + TF +
DP. The OGC whitepaper.

6. It is easily convertible to fiat money.


Once a OneGram Coin is issued, it can be redeemed for physical gold from
GoldGuard at any time. Any OneGram Coin redeemed for gold or equivalent in fiat
currency is sent to a publicly verifiable burn address, permanently removing the
coin from circulation. The OGC whitepaper.

7. The system is highly regulated. The joint efforts of many renowned companies of
global reputation and large experiments, i.e., (Lloyds (insurance), Loomis (vault and
secure the gold), Al-Maali CG (Shari'ah auditing), appointed auditors, DAFZ) would
give the opportunity of establishing a well-regulated payment system and a clear
path of investment.

8. The first, fifth, sixth and the seventh points may be deemed as the OGC competitive
advantage as compared to other crypto currencies systems such as Bitcoin.
(Iwamura, Kitamura and Matsumoto; 2014) have shed light on the price instability
of the Bitcoin which in their opinion is due to the weakness of regulations over
Bitcoin.
9. Moreover, this kind of currency is inflation resistant since it is backed by gold, i.e.,
the minimum value of OGC is linked or equal to the price of gold.
10. The OGC provides an opportunity to create a monetary ecosystem through granting
the current monetary system the chance to establish a diversified system which at
the end results in more resilient financial system.
11. The clarity of the investment ways and the ease of purchasing process.
Buying and selling crypto currencies like Bitcoin is not always an easy task.
Depending on where you live, there may be no obvious entry and exit point. Mining
crypto currencies is even more difficult, requires costly equipment, and is definitely
not for the average user. This is one of the reasons we are doing our ICO with
GoldGuard, offering the investors an easy way to acquire OneGram Coins. The
OGC whitepaper.

12. It is established with sophisticated technology.


13. It targets several types of investors.
14. It includes Fin-tech (it is obvious).
15. The OGC could be considered as an eventual prospect of product and system
diversification to Islamic finance.
16. It may represent a kind of disruptive innovations as far as the financial system is
concerned.
Bibliography :

(1)-Bernard Lietaer and Jacqui Dunne, 2013, Rethinking Money, Koehler Publishers, Inc, San
Francisco.

(2)-Bernard Lietaer and Jacqui Dunne, 2013, Rethinking Money.

(4)-Bernard Lietaer, Complementary Currency in Japan Today: History, originality and


Relevance.

(5)-Thomas. H. Greco, JR, Understanding and Creating Alternatives to Legal Tender, 2001,
Chelsea Green Publishing Company.

(7)-Thomas. H. Greco, JR, 2009, The end of money and the future of civilization, Chelsea
Green Publishing Company with River Junction, Vermont.

(8)-Bernard Lietaer and Jacqui Dunne, 2013, Rethinking Money.

(9)- Ahmed Kameel Mydin Meera, (2002a), The Islamic Gold Dinar, Subang Jaya, Malaysia,
Pelanduk Publications.

(10)- Ahmed Kameel Mydin Meera, (2002a), The Islamic Gold Dinar.

(11)-Bernard Lietaer and Jacqui Dunne, 2013, Rethinking Money.


4. The process of purchasing gold and its redeemability to OGC.

It is of high importance to differentiate among the various fees included in the participation
with OGC.

o At the Initial coin offering (ICO) stage, the participant is required to register first
with GoldGuard and purchase gold at live spot rates.
o The existence, storage of gold and its uses: After three days of purchasing gold, the
gold is physically delivered to our vault and the Goldguard company cannot sell,
leverage or use the gold that is own by the customer.
o This purchase includes (10%) fees of which it will be allocated as clearly illustrated
in the white paper as follows:
5% long term business development.
1.5% marketing costs.
1.5% operational costs (gold transport, fee to offer gold spot price, insurance,
storage fees)
2% salaries.
Example:

Let us say investor (A) would like to participate in OGC. The first step as explained above is to
register with GoldGuard and purchase gold at live spot rate. Let us assume that the gold live
spot rate is amount to 50 dollars and Investor (A) opts for purchasing 20 grams.

Accordingly, the price of 20 Grams of gold would be equal to: 50 x 20 = 1000 Dollars.

10% of 1000 Dollars would equal to 100 Dollars.

Therefore the total amount investor (A) would disburse to buy 20 grams of gold is equal to
1000 + 100 = 1100 Dollars.

These 100 dollars would be apportioned as follows:

50 Dollars: long term business development.


15 Dollars: marketing costs.

15 Dollars: operational costs (gold transport, fee to offer gold spot price, insurance,
storage fees)
20 Dollars: salaries.

o Moreover, we would find also the transaction fees estimated at 1% on every


transaction accomplished by the OGC participants.

Let us assume that investor (A) settled his dues to supplier (B) with OGC of an equivalent
value of 5000 Dollars. Then, 50 dollars would be generated to the system and it would be
divided in the following percentages:

70% (35 Dollars): is reinvested to buy more gold and increase the amount of gold that backs
each token.

basically what happens is that when we buy a new gold we increase the gold that is in each
coin and initially one gram of gold equal Onegram coin maybe after this the 1.2 grams will be
2 two grams in each coin the simple way to look at this is we share the profit of the company
with each person that hold the coin and we share this equally.
2.5 % (5 Dollars): for development and operations.

2.5% (5 Dollars): for charity donation.

2.5% (5 Dollars): for POS miner reward.


o The guaranteed reward for customer : The reward for each investor is not
guaranteed because it is against the ruling and principles of the shariah.
5. Governance aspects.

The South African King Report on Corporate Governance principles (2002) could be adopted
in the establishment of a good, efficient and sound governance system for the OGC with the
final objective of:

Setting the various aspects of governance such as management structure and


process, corporate responsibility, information disclosure and exercise of control and
rights of all the relevant parties to the OGC system (11);
Ensuring transparency and independency;
Avoiding the infringement of Shariah tenets, i.e., the Shariah compliance;
Guaranteeing the legal compliance with the different host jurisdictions or the
jurisdictions that endorse such a system;
Protecting the investors rights; and
Contributing to resolve the entrenched shortcomings in the present-day interest
based fiat monetary system.
Below is the illustration of those principles along with their application to OGC system (12).
Principles Quranic Injunctions Explanation

1-Transparency is the ease with which an


outsider is able to make a meaningful analysis
Now surely they fold up their of a companys actions, its economic
breasts that they may conceal fundamentals and the non financial aspects
(their enmity) from Him; now pertinent to that business. This is a measure of
surely, when they use their how good management is at making necessary
garments as a covering, he information available in a candid, accurate and
Transparency knows what they conceal and timely manner not only the audit data but
what they make public; surely also general reports and press releases.
He knows what is in the hearts.
(Al-Quran 11: 5)
As OGC is a kind of disruptive innovations in
Say with your mouth what is in
the monetary system, transparency in this
your heart (Al-Quran 3: 167).
side would be to spell out its economic
benefits in terms of financial stability,
financial diversity (monetary ecosystem),
diversification of investment avenues within
the ambit of Islamic finance and last but not
least the integration of sophisticated
technologies in the system and thus keeping
up with the distinguishing feature of the
modern era.

On the same note, the lucidity of the systems


flow either for payment or investment is
highly required to maintain high standards of
transparency.

2-It reflects whether or not investors obtain a


true picture of what is happening inside the
company.

The investors with OGC must figure out


among others the functioning of the system,
the investment channels, investment
processes, types of investment if any, risks
associated with their respective investments,
returns to their investments, different parties
involved in the management of the system,
the nature of the relationship among all the
relevant parties to the system, risk
management mechanisms to mitigate the
potential risks linked to their investment and
the protection measures of their rights.

Individuals or groups in a company, who make


To Allah belongs whatever is in
decisions and take actions on specific issues,
the heavens and whatever is in
need to be accountable for their decisions and
the earth. And whether you
actions.
manifest what is in your minds
or hide it, Allah will call you to
Accountability
account according to it. So He
Mechanisms must exist and be effective to
forgives He pleases and
allow for accountability. These provide
chastises whom He pleases. And
investors with the means to query and assess
Allah is Possessor of power over
the actions of the relevant quarters to the
all things. (Al-Quran-2: 284).
system.
This requires the accurate determination of
the lines of responsibilities and duties of the
different parties involved in the system
towards the participant in OGC.

Further, such a principle makes an obligation


for the management team or the board as the
case may be, to insure the compliance to
Shariah requirements over all the process
either for payments or investments.

Respect and honor all human Corporate discipline is a commitment by a


beings irrespective of their companys senior management to adhere to
religion, color, race, sex, behavior that is universally recognized and
language, status, property, accepted to be correct and proper.
birth, profession / job and so
on. (Al-Quran- 17: 70).
This encompasses the relevant parties
When you meet each other,
awareness of, and commitment to the
Discipline offer good wishes and blessings
underlying principles of good governance
for safety. One who conveys to
particularly Shariah Governance.
you a message of safety and
security and also when a
courteous greeting is offered to
you, meet it with a greeting still
more courteous or (at least) of
equal courtesy. (Al-Quran- 4:
86).

With regard to management, responsibility


pertains to behavior that allows for corrective
actions and for penalizing mismanagement.
Fulfill your promises and
Responsibility Responsible management would, when
commitments. (Al-Quran- 17:
(trust) necessary, put in place what it would take to
34).
set the company on the right path and act
responsively to and with responsibility towards
all stakeholders of the company.
Shariah compliance is the backbone of the
OGC, therefore, a set of rules and procedures
should be established to proceed with any
corrective action with respect to any
transaction proved to be not conforming to
Shariah rulings.

Of these measures is to lay down sound


periodical Shariah review and Shariah
auditing.

This would definitely enhance all the


stakeholders confidence in the OGC system.

Independence is the extent to which


mechanisms have been put in place to
minimize or avoid potential conflicts of
interest that may exist.

These mechanisms range from the


composition of the board, to appoint
committees of the board, and external parties
such as the auditors.
Independence

The decisions made, and internal processes


established should be objective and not allow
for undue influences.

As of OGC, it comprises different parties:

GOLDGUARD.
LOOMIS.
ALMAALI CONSULTING GROUP.
LIOYDS.
PWC.
ABX.

This multitude of partners would generate a
kind of complex relationship. In this state of
affairs, a sound mechanism which would
guarantee the independence of each and
every quarter in fulfilling its duties owed to
investors and other partners is highly
required.

A special attention is assigned to the


independence and enforcement of Shariah
regulations and decisions. The duties of this
important party is to follow up the whole
procedures and transactions over the system
through the process of Shariah review,
Shariah auditing and sometimes Shariah
research to ensure the adherence of all
transactions to Shariah tenets, i.e.,
avoidance of interest, gharar and other
prohibited elements.

A well managed company will be aware of and


respond to social issues, placing a high priority
on ethical standards. A good corporate citizen
Worship Allah and associate
is increasingly seen as one that is non-
nothing with Him, and to
discriminatory, non-exploitative and
parents do good, and to
responsible with regard to environmental and
relatives, orphans, the needy,
human rights issues. A company is likely to
the near neighbor, the neighbor
Social experience indirect economic benefits such as
far away, the companion at your
Responsibility improved productivity and corporate
side, the wayfarer, and those
reputation by taking those factors into
whom your right hands possess.
Indeed, Allah does not like those consideration.
who are self-deluding and
boastful. (Al-Quran- 4: 36).
-This paramount aspect is taken into
consideration as the OGC opens the door to
charity through the 2.5% deducted from
every transaction fee and thus enhancing the
corporate social responsibility.

Giving back to the community and setting a


good example for others is central to how we
do business. We seek to contribute to social
and economic progress both globally and
locally.

With that in mind, we created the OneGram


Foundation (OGF). OGF will take 2.5% of the
total transaction fees that OneGram products
generate and donate it to local and
international charities.

By sharing our success, we aim to bring relief


to the lives of the less fortunate.

OGF supports the principles of Islamic sharing


and caring. The OneGram community is
contributing, through corporate social
responsibility, to humanitarian causes. The
OG whitepaper.
Consultation shall be the basis of any type of
decision made within the corporate. Arbitrary
control by one or a group of people will
definitely lead to oppression. Hence,
consultation shall be part and parcel or an
integrated part of the OGC governance system.
Their affairs are decided by
consultations between them. This requires among others an efficient
Consultation (Al-Quran- 42: 38). communication process among the relevant
parties to the system to avoid oppression,
Consult them in affairs (of
ensure the smooth operational aspect of the
moment. (Al-Quran- 3: 159).
system, enhance the transparency and
independency of all the parties involved,
strengthen the Shariah review and auditing
processes and last but not least gather all the
information pertinent to the continuous
development of the system.
You are the best of peoples The systems that exist within the OGC must be
evolved for humankind, balanced in taking into account all those that
enjoining what is right and have an interest in it and its future. The rights
forbidding what is wrong and of the various parties and investors have to be
believing in Allah. (Al-Quran- acknowledged and respected.
Cooperation 3: 110).

Cooperate with one another in


The emphasis in this respect would concern
good deeds and do not
primarily the quarters bound to guarantee
cooperate with others in evil
the well functioning of the OGC system.
and bad matters. (Al-Quran- 5:
2).
6. Shariah requirements:
Overall:

1. The Compliance and conformity with Islamic laws requires three stages that are
integrated with each other to ensure that effort is made and the possibility of achieving
the principles and purposes of the Sharia in this product is fulfilled. These stages are:
o The Shari'a ruling issued by the competent Shari'a Board of this company, after
considering all stages of the product, all documents, contracts and order.
o The Shari'a compliance: Review the first processes before and during the
implementation to verify the conformity of what is implemented with what
explained and submitted to the body.
o The sharia audit: which is semi-annually to scrutinize the samples through which
the opinion is given in the legitimacy of the compatibility of the processes carried
out with the fatwas issued by the Shariah Committee.

2. In this product, Shari'ah compliance is observed in accordance with Shari'ah rules in


general and the following Shariah standards:

Shariah standard number (57): Gold and its trading controls: the gold standard
issued in 2016 was appropriated to spell out the fundamental and contemporary
provisions of gold trading.
Shariah standard number (1): Trading in Currencies: this standard aims to
explain Shariah rulings pertaining to trading in currencies.
Shariah standard number (7): Hawalah.
Shariah standard number (35): Zakah.
In detail:

The adherence of this product to the fundamental Shari'ah rulings has been taken into
consideration through addressing some aspects of the OGC mechanism, the most important of
which

1. Rulings of purchasing gold at the time of issuance:


The immediate exchanging in the case of purchasing gold with currency:
paragraph 3/4 of Shariah standard on gold and its trading controls asserts on
the following: when gold ingots are sold for currencies, the counter-values
must be exchanged during the contracting session. Possession of the ingot by
the buyer, or his agent, is realized either physically or constructively.
Constructive possession is realized by allocation of the ingot and by enabling
the buyer to dispose of it, or by holding a certificate that represents ownership
of a specified ingot that is distinguishable (an allocated ingot) from others, by
serial numbers or other distinct marks from other ingots.

The same standard in the paragraph (3/5/1) ascertains that: It is permissible to


jointly own gold where each partner owns an undivided share of a specified
percentage in the pool of gold.

2. Rulings of purchasing goods and services with OGC:


In the case of purchasing goods with currencies, the immediate exchange is
not required: It is distinctly stated in the paragraph (3/1/4) of Shariah gold
standard that: Sale of gold for anything other than gold, silver or currencies as
in the case of selling gold for commodities (other than gold, silver, or
currencies) or usufruct or service- is permissible at any price without the
requirement of immediate exchange of the counter-values.
3. Shariah Parameters of investment and Mudharabah in OGC:
Constructive possession of gold deposited with GoldGuard: paragraph 2/6/5
of trade in currencies standard asserts that: Constructive possession of an
asset is deemed to have taken place by the seller through enabling the other
party to take its delivery and dispose of it, even if there is no physical taking of
possession.
On the same note, the aforesaid standard in its paragraph 2/6/1 emphasizes on a
particular point (timing) with respect to the possession of an amount of
currency that is the subject matter of the contract. It says: When a contract is
concluded for the sale of an amount of currency, possession must be taken for
the whole amount that is the subject matter of the contract at the closing of
the transaction.

4. The Shariah ruling on the disposition of gold deposited with GoldGuard:


Paragraph (4/5) of Shariah standard No. 57 on gold and its trading controls
underlines that: Deposits of gold shall be held in trust with the depository. It
is not permissible for the depository to use or dispose of deposits of gold (gold
deposited with it).

5. Fees (commissions): The issuing and trading fees are considered as part of Ijarah.
Therefore, it is legitimate from Shariah perspective in so long as it is fair and in line
with the customary or market fees.

6. Zakah: in this regards, we continually refer to the mechanisms illustrated in the


Shariah standard No. 35 in which the cases of corporate payment of Zakah is clearly
expounded coupled with the disclosure requirements that should be included in the
quarter and annual reports.

7. Shariah governance report: a duly annual report on Shariah governance is highly


required.

8. The verification of the fairness and objectivity of the fees and commissions: The
fees and commissions imposed by the company on the issuance and trading of the
OGC should be fair and objective and the company shall be held liable to keep
proving that.

9. Charity funds: Shariah board shall oversee and supervise the (distribution,
disbursement) of charity funds to its beneficiaries as provided for in the relevant
standard or legislation or procedure.

10. Shariah board shall supervise the foremost operations carried out so as to ascertain
their accord with Shariah rulings.
Conclusion:

- OGC is a digital cryptocurrency that is backed by gold and thus has an intrinsic value.

Unlike Bitcoin, OGC could be acquired with a known and predetermined fee.

Furthermore, the gold is produced and vaulted by a renowned company which has the

necessary licenses and insurance coupled with an external auditing from a competent

body (PWC).

- The trading of OGC should adhere to Shariah rulings of trading in currencies if

the counterparty in the transaction is another currency or gold. Further, it should

abide by the Shariah parameters of Hawala in case of transferring OGC from one

place to another or from an owner to another. Finally, it should comply with the

Shariah tenets of sale and purchase in the event of using it in transactions

involving the purchase of goods and services.

Investing in OGC should either comply with leasing rulings in so far as the owners are
concerned or with one of the abovementioned Shariah parameters as the case may require as
far as the investors are concerned.

Note:

This research is not an advice or commercial counsel to the clients ... and
disclaims its legal liability for any violations of the laws or regulations in
force.

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