While developing, the financial world of Islam is actively studying new tools of the digital economy. Turkey, Iraq, Saudi Arabia, and the United Arab Emirates, one by one, declare the creation of a national cryptocurrency. It should be noted that each country has its own motives and reasons. That's what the third part of the text of the Mesopotamian triangle is about.
Ep.3: Geopolitical breakup. А fight in the Arabian sandbox
The geopolitical breakup between the key points of the Middle Eastern triangle is running along three lines at once.
The first one - let's call it "East - West" for our purpose. Turkey and Saudi Arabia have traditionally been allies of the United States. We recall that it is in Saudi Arabia where the central command post of NATO forces in the Persian Gulf zone is located, and in Turkey, in one of the oldest NATO members, the largest Incirlik military air base is situated, from which the vast majority of combat missions during Iraqi wars, as well as the Afghan and Libyan operations were flown.
You can't say the same about Iran. Strained relations between it and the North American superpower have been maintained since 1979. The Islamic Revolution rejected the Western model of development proposed by the United States and turned public attention to the search for spiritual values. In the general political aspect, this was reflected in the denial of the prevalence of individual interests over the interests of society, the unacceptability of freedom of expression and moral choice, the inadmissibility of the existence of the State of Israel, the non-recognition of the legitimacy of a number of political regimes in the Middle East, including the Saudi monarchy, and many other things. At the same time, the religious revolution gave the Iranians some democratic freedoms as well: elections, a system of separation of powers, and even liberty of speech in everything that does not concern spiritual values and their main bearer, the highest spiritual leader - faqih.
The second line of the breakup is interreligious. Turkey, Saudi Arabia, and Iran belong to two different branches of Islam - Sunni and Shiite.
However, the first two countries belong to different areas of Sunni: Sufi (moderate Islam) and Salafi (fundamentalism). Moreover, since the beginning of the 20th century, since the time of Kemal Ataturk Turkey, has positioned itself as a secular state. And, in fact, it was: the urban population of the country lived a very secular life. But lately, the position of Islam in the Turkish political field has strengthened.
Iran, in turn, is trying to protect the interests of the Shiite minority in the Middle East at all costs. 20% of the population of Turkey and Saudi Arabia are Shiites. Also, the struggle between fundamentalist and moderate Islam is running high in Turkey. All this is tied into a tight knot of religious contradictions, which are already developing into real “hot” conflicts.
The civil confrontation between the Sunnis and the Shiites in Yemen has, in fact, turned into an undeclared war between Saudi Arabia and Iran, the purpose of this war is to control the Bab el-Mandeb strait connecting the Red Sea and the Gulf of Aden. If Iran wins, then at any moment, it will be able to cut the oil and financial arteries of Saudi Arabia, which has concentrated a huge cluster of oil storages on the Red Sea shore.
Turkey is fighting on the territory of Syria against the Kurdish Pêşmerge self-defense formations, supported by the United States and Saudi Arabia, being an actual ally of Iran (against which it is also fighting), but remaining a member of NATO.
Everything has been mixed up in the Persian Gulf: blood, oil, water, and money.
The third breakup is international. In the Middle East, the superpower ambitions of three ethnic groups converged: the Turks remembering the times of the Ottoman Empire, the Arabs (Saudi Arabia) - dreaming of the era of the Arab conquest of Central and Eastern Asia, as well as parts of Europe, and the Persians (Iran) who controlled the Middle East since Alexander the Great to Middle Ages. The radicals of each ethnic group believe that they deserve more to dominate over oil and Islamic finance, to be the first in everything, including the digital market.
Virtual currency: who will be the first to touch the digital heavens
The power elites of Iran, Turkey, and Saudi Arabia are well aware that the digital economy is the future of global finance. And whoever will be the first to institutionalize this sector of the economy will gain control over IFMs and the Islamic world, in general. Therefore, the politicians of the three countries, trying to outdo each other, announce the launching of their own national virtual currency.
The Middle Eastern race began in February 2018, with the report of the Turkish state crypto project. Kenan TANRIKULU, the Chairman of the Nationalist Movement Party and the former Industry Minister, prepared and published a special report on the development of the digital economy, which featured the name of the national virtual unit of payment Turkcoin. “The world is moving to a new digital system. Before it’s too late, Turkey should create its own digital system and currency,” he said in an interview. The deputy also explained that the coin would be provided with state-owned securities of leading Turkish companies, which would make it less subject to risks.
Two months later, Iran came forward with a similar initiative. The President of the Islamic Republic, Hassan ROUHANI, gave instructions to the National Center for Work with Cyberspace and the Central Bank to prepare the technology and the regulatory framework governing the issue and circulation of the state cryptocurrency. By the autumn, the work was completed, and the coin should appear in the first half of 2019.
In October 2018, Saudi Arabia and the United Arab Emirates announced their plans to issue a common digital currency. The President of the Central Bank of the United Arab Emirates Mubarak AL MANSOURI said that the project was in the developmental stage but it would not replace fiat money. “It will be a payment instrument used by banks, not individual citizens,” he emphasized. It is also planned to launch the cryptocurrency into circulation in early 2019.
Who will be the first? The emergence of a state-owned Islamic digital coin can change not only the image of the digital market or Islamic banking - it will affect the global politics since it will become a serious claim for dominance in the region where the interests not only of Islamic states but of all superpowers at once converge.
The thesis that Muslim states lack a unifying factor to resist the pressure of global centers of power, such as the United States, China, or Russia, has become commonplace among political scientists in many countries of the world. And such a factor will soon appear: the bunch of “strong national cryptocurrency - control over the digital market - management of Islamic finance - dominance in the Islamic world” should work.