Research Article
The Sharia Compliance of Gold-Backed-Cryptocurrency: Analysis of Volatility and Risk
@INPROCEEDINGS{10.4108/eai.12-12-2020.2304995, author={Fauziyah Adzimatinur and Vigory Gloriman Manalu and Faishal Rahimi}, title={The Sharia Compliance of Gold-Backed-Cryptocurrency: Analysis of Volatility and Risk}, proceedings={Proceedings of the 1st Universitas Kuningan International Conference on Social Science, Environment and Technology, UNiSET 2020, 12 December 2020, Kuningan, West Java, Indonesia}, publisher={EAI}, proceedings_a={UNISET}, year={2021}, month={3}, keywords={cryptocurrency; gold-backed; sharia compliance}, doi={10.4108/eai.12-12-2020.2304995} }- Fauziyah Adzimatinur
Vigory Gloriman Manalu
Faishal Rahimi
Year: 2021
The Sharia Compliance of Gold-Backed-Cryptocurrency: Analysis of Volatility and Risk
UNISET
EAI
DOI: 10.4108/eai.12-12-2020.2304995
Abstract
Cryptocurrency in the perspective of Islam has currently become a subject undergoing intense study among researchers. The Islamic perspective of money, has specific characteristics and requirements, such as stability and is based on assets. These characteristics also applied to the Cryptocurrency as it becomes the latest trend of payment. There are several Cryptocurrencies that has gold back up. This research aims to evaluate the volatility and risk possessed by the gold-backed Cryptocurrencies compared to other cryptocurrencies (Bitcoin and Ethereum), S&P500, and gold. The stability of Gold-Backed-Cryptocurrency is analyzed using ARCH-GARCH method. The data used in this research is daily data of Gold-Backed-Cryptocurrency price for a year. The results will show us how close the gold-backed-cryptocurrencies to the Sharia Compliance. The results show that gold-backed-cryptocurrencies are more volatile than Bitcoin, Ethereum, S&P500. This shows how unstable they are and greater risk they possess. The results conclude that gold-backed-cryptocurrencies are nowhere close to the sharia compliance. Other characteristics have to be fulfilled such as authorities and free of speculation.
