Shanghai Gold Exchange is being considered as a potential benchmark for a new Islamic banking
Islamabad: China could emerge as a significant player in the Islamic banking industry, which is currently experiencing a compound annual growth rate (CAGR) of approximately 10% globally.
Despite certain challenges, the Shanghai Gold Exchange is being considered as a potential benchmark for a new Islamic banking model that operates outside the traditional interest-based financial system.
Khalid Qazi, a former banker and Islamic Researcher has said that the proposed Islamic banking model would leverage the Shanghai Gold Exchange market, where gold is physically traded, and ownership is transferred at the close of each auction making it a perfect benchmark fulfilling all the prerequisites for Islamic sharia compliance.
The Islamic finance sector, encompassing Islamic banking, sukuk (Islamic bonds), takaful (Islamic insurance), and other financial services, has assets valued at around $3.6 trillion. Projections suggest that this figure could surpass $4 trillion by 2025, signaling continued robust growth.
According to Mr. Qazi, Market prices, determined by supply and demand dynamics, would serve as the foundation for this innovative banking framework.
Mr. Qazi emphasized that, if implemented, this model could revolutionize the global financial system, particularly benefiting Islamic countries by enabling them to transition away from interest-based banking—a longstanding aspiration for Muslims worldwide.
