Greater 'trust factor' as halal certification meets Islamic fintech

There's a fresh solution in the offing for Muslim consumers facing uncertainty over halal certifications: verification via blockchain.

POCertify is a new decentralised application, or dApp, which uses blockchain and smart contracts technology to publish Halal certificates. It is the brainchild of IT entrepreneur Shabeer Shaik Abdurahaman, who specialises in Islamic fintech.

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The design, Abdurahaman says, is on a transparent, secure and decentralised platform, with verification via a digital hash signature.

This reassures users that the certification is both more secure and more independent.

The method also provides anonymity and privacy, which limits modification by third parties such as governments or businesses.

Halal is an Arabic word meaning permissable. In Islam, it can be applied to several things but it is most commonly used in relation to food. Food classified as halal has to be certified in terms of several Islamic guidelines.  

Control by individuals

Blockchain technology has been widely hailed by enthusiasts as revolutionary because it is entirely decentralised. This means storage is not in one central point, removing the need for powerful central authorities and putting control in the hands of individual users instead.

"Blockchain technology, together with Islamic principles, will digitally encrypt the Halal Certificate in its PDF format, and verify the Halal Certificate on the blockchain," Abdurahaman explains.

"If it is correctly verified, it proceeds to be used, and if not, the producer or supplier is not given the certificate." 

Booming market

According to the Pew Research Centre, Muslims make up the majority of the population in 49 countries across the world, with the global Muslim population expected to reach 2.76 billion – or 29.7% of the world's population – by 2050.

According to 2018 reports, the halal food market is expected to reach US$739.59bn by 2025, and the halal market overall – encompassing travel, entertainment, food, finance and other services – is expected to reach US$12.14trn. Islamic finance counts for 43% of the total industry.

• READ: Halal products showcased in Cape Town

With blockchain technology developing rapidly and the global halal market booming, it was only a matter of time before Islamic fintech caught up.

Abdurahaman says he hopes to cater to this rapidly growing market, developing applications that help build trust where there has, he believes, at times been "negligence and manipulation".

The trust issue

In 2011, there was widespread outrage when leading SA meat distributor Orion was accused of knowingly labelling non-approved kangaroo and water buffalo, and even pork, as halal. At the time, Orion said there was sabotage. The issue fueled national debate.

In 2016, the Department of Islamic Development Malaysia (JAKIM) delisted the Muslim Judicial Council Halal Trust after it failed an independent audit. JAKIM's audits test whether Halal authorities meet certain international health and safety standards.

• READ: Local authority refutes US halaal chicken claims

"This reflected on a multi-billion dollar industry, with the Islamic population of South Africa facing problems [with] food," says Abdurahaman.

He believes there is a need to improve the "trust factor" for store owners, food and beverage manufacturers, restaurants and Halal institutions.

Peace of mind

Abdurahaman is not the only entrepreneur to turn to blockchain to cater to a halal market. HalalChain, launched in Dubai earlier this year, was developed by HLC Technologies to allow consumers to trace and track halal products, helping them overcome regulatory uncertainty and any doubts about accreditation.

Similarly, UK-based Halal Trail tracks livestock and fresh food from the farm throughout the supply chain, ensuring verification is legitimate.

HalalGuide, meanwhile, is an existing global platform used by 1.5 million Muslims worldwide on a peer-to-peer network, helping them connect with various halal resources. It recently unveiled a partnership with blockchain developer Apla. 

Abdurahaman believes trust is an essential component in why halal has found a home in blockchain. "Certifications have been a complex task right from the very beginning," he says. "What makes it even more difficult is the [trustworthiness] of it.

"In the case of a halal certification, strict guidelines need to be maintained, given that the Muslim population is dependent on it."