Proceedings of the 1st Universitas Kuningan International Conference on Social Science, Environment and Technology, UNiSET 2020, 12 December 2020, Kuningan, West Java, Indonesia

Research Article

The Sharia Compliance of Gold-Backed-Cryptocurrency: Analysis of Volatility and Risk

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  • @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
Fauziyah Adzimatinur1,*, Vigory Gloriman Manalu1, Faishal Rahimi1
  • 1: Universitas Kuningan, Indonesia
*Contact email: f.adzimatinur@uniku.ac.id

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.