Wahed, a New York-based Islamic fintech backed by Saudi oil giant Aramco (2222.SR), has launched a gold-backed debit card that is Sharia compliant and avoids customer money staying inside the traditional banking system, where it would be exposed to interest.
It unveiled the card at the opening of its London branch in Baker Street, its first in the UK.
The new card stores customer money in gold (GC=F), allowing them to spend and save without risking exposure to lending. Investors will also be able to redeem the gold in their accounts for physical bars.
Wahed, also a "halal" share trading platform, said it is catering to an unmet demand.
Founder Junaid Wahedna said: "The gold-backed debit card addresses a major issue faced by many Muslims, particularly in the UK, who have traditionally stored their money in cash.
"This practice has contributed to a cycle of poverty and left them vulnerable to scams.
"Our debit card uses an exchange-traded commodity on the London Stock Exchange (LSEG.L) to store customer assets in gold, ensuring that their money is safe, helping it to grow, and allowing them to spend and store money without risking exposure to Riba."
Riba is an Arabic word that refers to unequal exchanges or charges and fees for borrowing.
Under Islamic law, interest is deemed riba, or an unjust, exploitative gain, and as such is forbidden.
Wahedna added: "It is also safer to use gold against the current depreciation of fiat currencies, which particularly affects those who keep their savings in cash as they’re hit the hardest from inflation."
"We are confident that this product will provide significant benefits to our customers and help to improve their financial well-being.”
Wahed, which targets customers looking for Sharia-compliant investments, is backed by UFC (Ultimate Fighting Championship) star Khabib Nurmagomedov.
"The launch of Wahed’s new London branch and debit card makes it more accessible for everyone," said Nurmagomedov, who is also Wahed's brand ambassador. He is one of the high-profile backers who helped the company raise over $75m (£60m) in funding.
Other investors include international footballer Paul Pogba, "strategic family offices" and institutions such as the Saudi Aramco Entrepreneurship Center (Wa’ed).
Its mission is to change how the Muslim community participates in global financial markets by making investing accessible and ethically compliant for the 1.8 billion Muslims globally.
For many Muslims, investing in line with their faith is made more complex due to the exclusion of companies that obtain their profits from interest.
Most major banks including HSBC (HSBA.L) and investment platforms such as Robinhood (HOOD) also offer Sharia-compliant products. HSBC is the only high street bank to offer an Islamic mortgage service.
According to The Dollar Bureau, Wahed's two ETFs are the most profitable Sharia compliant funds. The EFTs on the NASDAQ and Dow Jones come in at numbers one and two most profitable funds respectively.
There are alternative Sharia compliant EFTs including Wealthsimple Shariah World Equity Index ETF (WSHR.NE), the S&P500 (^GSPC) Shariah Industry Exclusions ETF, and the SP Funds S&P Global REIT Shariah ETF (SPRE).