This is the second part of a three part series of articles on how the principles of Islamic finance could be applied for macro economic growth. (For first part, click here).
One of the pillars of modern economic growth in a country is the common currency that is used as a means of exchange and backed by the political authority of the state (until recently it used to be backed by the total of Gold deposits held by the Central bank of the country).
What if the currency is not backed by the political authority, but, is vested with an independent group comprising of either bankers and/or political groups outside of the country – a trans-national economic union with a common currency, like Euro?
An example is the current predicament of Greece. The past quality of governance of Greek politicians could be one of the reasons for putting Greece in such a situation. But, what could be done to restore the power to people in the true spirit of a democratic republic?
One such means could be to identify globally tradable currencies that are not backed by either the political authority of the state or bankers or vested interest groups, but, are backed by an open, transparent and globally verifiable financial transactions that can be questioned through a social audit.
Current advances in Technology provides us with such means. One such advance is the block-chain technology that is used to generate Crypto-currencies, like Bitcoin et all…
Integrating Islamic contracts with the open, transparent and globally verifiable means of monetary exchange sans the authority of the state or a group, possibly helps in building an economically integrated whole of communities.
The next and last article in this three part series is about this integration.