Harris Erfan, Head of Global Islamic Finance at Barclays Investment Bank of the United Kingdom, said that one of the attractive aspects of fintech is the use of technology to solve existing problems, but blindly use of this technology is rejected.

Advantages and disadvantages of blockchain technology

He fully introduced the technology which is extremely difficult to manipulate and change due to the nature of the distribution of information on this platform. In addition to the distributed and decentralized structure of the blockchain, another outstanding advantage of this technology is its Trustlessness. Trustless means that there is no longer any need for the intervention, mediation of the individual and the intermediary organization, and the individuals themselves are directly involved in the processes and protocols and as a result there will be no censorship, sabotage or manipulation.

Using blockchain to do something requires far more processing power. Contrary to popular belief, using this technology is neither fast nor cheap nor efficient. In every task which was related to the use of blockchain that I have seen, there is still an intermediary, except for the area of ​​cryptocurrencies.

Potential applications of blockchain includes digital payments by cryptocurrencies, smart contracts through Ethereum, and database and record management.

Creating smart sukuk on blockchain is not very practical

The main question that Erfan raised was what is the main financial problem that we intend to solve by using blockchain? He pointed that achieving the decentralized concept and decentralization must be so important and convincing that it is worth the extra cost.

Harris Erfan does not quite agree with offering sukuk on blockchain because it does not seem to be cost effective and also does not have the necessary efficiency and is more like a fake hot market that companies and organizations create to sell more of their products.

He said look beyond these ads and hot markets and think about exactly what problems and concerns you are trying to solve by using blockchain. Do you need decentralization or more standardization or efficiency? Because in this case I have to say that blockchain reduces performance. If your goal is to achieve standardization, it also goes against diversity and freedom. If people trust their regulators, there is no need to use blockchain, which is very expensive, but if they do not trust regulators, blockchain can be a good option.