Finance rules

[HNeal77]

Question: is there a brief way to summarize what Shariah entails regarding finances?
In the US (and probably others), “ Shariah law”has been used as a scare tactic by politicians on the right, with considerable success, sadly. Fear sells, especially among those too gullible to closely examine what they are being told to fear.
If seeking to widely distribute keel, it might help to consider this issue.

[eaitbrahim]

Short answer: four prohibitions and one obligation.

• Riba — interest. Money cannot earn money by itself. A return has to come from bearing real risk in real activity, not from lending at a guaranteed rate.
• Gharar — excessive uncertainty. Contracts must be clear, and you cannot sell what you do not own or have not taken possession of.
• Maysir — gambling. No zero-sum wagering presented as investment.
• Prohibited sectors — alcohol, pork, gambling, adult industry, weapons, conventional interest-based finance.

Plus zakat, an annual ~2.5% levy on idle wealth — an obligation to redistribute rather than a restriction on activity.

What survives is unremarkable: own real assets, take genuine risk for genuine return. No leverage, no shorting, no derivatives, no selling what you do not hold. In practice this makes keel more conservative than a standard brokerage account, not less — it rules out most of the instruments that failed in 2008.

One point worth adding, because it bears directly on your second paragraph: this was Christian doctrine for roughly a thousand years. The usury prohibition runs through Aquinas, the Third Lateran Council and centuries of canon law, and the same rule appears in Deuteronomy. Islam retained a prohibition that Europe relaxed for commercial rather than theological reasons. It is not a foreign import; it is a road not taken.

On the naming problem

You are right, and it has already changed how the project describes itself.

The word doing the damage is "law", which implies something imposed on other people. keel is the opposite: one person constraining his own trading, using software that refuses to let him make a convenient exception later. Nobody's conduct is governed but the operator's own.

There is a design decision that makes this concrete, and it is the substantive answer to the concern rather than a reassurance about it: keel is not a fatwa engine. It never determines what is permissible. The operator records a classification — with a source and an attributed name — and the engine enforces that classification deterministically, refusing anything unattested. Two operators following different schools of thought get different results from identical code. No ruling is embedded anywhere in the software; the ruling is an input.

That is also why the honest description is closer to "a compliance engine that happens to have been built for one ethical framework". The same machinery would work for someone screening out fossil fuels or arms manufacturers.

Your phrasing — an engine built around Shariah financial principles — is a genuine improvement on what the project had, because "financial principles" names a domain, where "law" implies a jurisdiction. It is being adopted, with one adjustment for accuracy: the engine enforces principles the operator supplies rather than having them baked in.

Thank you for raising it in public. It is the first time this question has been on the record here, and it is better asked by someone sceptical than answered by me unprompted.

[HNeal77]

So if my bank is one that pays/charges interest will I be able to use keel?

[HNeal77]

I suppose what I’m asking is whether this is one of the principles supplied by the user?

[eaitbrahim]

Short answer: yes, you can use it — keel never touches your bank. It operates on a Coinbase account and has no connection to, visibility of, or authority over anything your bank does. Whatever interest your bank pays or charges is entirely outside its scope.

But your second question is the better one, and the honest answer is that there are three categories here, not two.

1. What you supply. The classifications — is this asset's sector permissible, is it an owned thing ('ayn) or a claim on an issuer (dayn), does it pay a yield. These are the rulings, and they are inputs, as in my earlier answer.

2. What the engine enforces mechanically. These are not opinions, they are invariants. One example directly on your point: a buy may only ever spend an already-settled balance already sitting in the account — it can never draw from a linked bank or ACH source. And if the engine cannot read the balance for any reason, the trade is refused rather than attempted. Silence is not consent to spend.

3. What the engine admits it cannot see — and this is the part worth your attention.

Coinbase pays USDC Rewards on idle balances. That is interest, and it arrives inside the account keel trades in. keel cannot verify it is switched off, because the trading API exposes no rewards endpoint. So this is not enforced; it is written into the operator runbook as a required manual step, with an explicit note that it cannot currently be automated and should not be faked. A config flag claiming "rewards disabled" would be a comforting lie, so there isn't one.

What makes that admission more than a disclaimer is that there is a remedy for the gap. Interest credits do show up in the transaction ledger even when they cannot be prevented — so keel counts what actually accrued and computes the amount that must be given away rather than kept. It reports the figure; moving the money is the operator's act, never the software's.

There is a mechanical reason this matters beyond bookkeeping. Position size is computed from account equity. Interest left sitting in the balance would inflate the equity the sizing formula reads from — so riba would literally compound into position size. Segregating it is a correctness fix as much as a religious one.

So: partly supplied by you, yes. But the sharper line is between what can be mechanically checked, what can only be attested by a human, and what can be measured after the fact and corrected. keel tries to be explicit about which of the three any given obligation falls into, rather than implying it has enforced things it hasn't.