Singapore-based IBF DigiLabs has entered into a joint venture (JV) with Ethis Global, spurred by the former being accepted into the FIKRA Islamic Fintech Accelerator Program, an initiative by Securities Commission Malaysia and the UN Capital Development Fund.
The admission of IBF Digilabs, a member of IBF Net Group, into Malaysia’s first fintech accelerator program designed specifically for the Islamic capital market, is based on its latest project called Confluence. Confluence measures the impact of projects from the standpoint of Shariah as well as the UN sustainable development goals (SDGs) using an artificial intelligence (AI)-based impact scoring platform.
According to Mohammed Obaidullah, the founder of IBF Net Group, IBF DigiLabs has conducted research on the alignment or otherwise of the SDGs with Shariah objectives. The findings are being enhanced to develop a robust framework. A text analysis of relevant data and literature enables an identification process of new metrics in view of Shariah objectives and the redesignation of some existing ones based on alignment or otherwise of SDGs with the former.
Phase 1: Impact scoring platform
The project comprises two phases. The first phase would see IBF combining the metrics using an algorithm and produce a score and/or a classification scheme reflecting the impact of projects through the lens of Shariah as perceived by the respective stakeholders – the project owner(s) and the market. The new IBF-Ethis JV, Islamic Value Analytics, will be implementing its go-to-market strategy.
“This AI-based impact scoring platform, besides being a standalone destination for investors interested in obtaining an impact rating for projects, would also serve as a front-end application with crowdfunding platforms seeking to raise equity resources. It can provide valuable data for Islamic investors seeking to make a difference to the world while realizing their risk-return expectations,” explained Umar Munshi, the founder of the Ethis Group and strategic advisor with IBF DigiLabs.
Phase 2: Green and social crypto assets
In Phase 2, IBF will identify and adapt a suitable method in the light of the goals of Shariah to measure and convert such impact into green or social cryptos.
“Projects can earn/liquidate such cryptos representing both types of impact at an exchange to alter their risk-return-impact profile in the market. This platform, a marketplace for trading such cryptos, is being developed using Algorand blockchain technology which is scalable, secure, decentralized and Shariah compliant,” expounded IBF Digilabs. Unlike other protocols, Algorand maintains a carbon-negative position at all times.
Algorand, a North American crypto platform, is a strategic partner of the IBF Net Group and it will work with the former for all its blockchain-related initiatives, Mohammed Alim, CEO-designate of IBF DigiLabs who also serves as Ethis Global’s chief product officer, told IFN Fintech.