@daily_btc_lore | Daily Bitcoin History Threads

June 24, 2011 | 15 years ago today

The Islamic Bank of BitcoinThe Islamic Bank of Bitcoin

A forum post at 1:34 AM announced a Bitcoin bank with no interest, no collateral, and no enforcement mechanism beyond goodwill. It listed on a stock exchange. It paid dividends. Then it quietly disappeared.

The AnnouncementThe Announcement

At 1:34 AM on June 24, 2011, Bitcointalk user senbonzakura posted the founding announcement for the Islamic Bank of Bitcoin, ticker IBB. The idea was straightforward and, for the time, genuinely novel: bring Sharia-compliant finance into a currency economy that barely had a stable exchange rate.

Why It Had to Work DifferentlyWhy It Had to Work Differently

Islamic finance bars Muslims from collecting or paying interest, so a normal lending desk was never on the table. Founder Danijel Habek built IBB around musharakah instead, profit-and-loss-sharing joint ventures in which the bank and the borrower split the upside and the downside together rather than one side renting money to the other. Loans carried 0% interest. Borrowers could tip the bank 2 to 5 BTC out of gratitude if a venture succeeded, but nothing was mandatory. Habek said he wanted Sharia principles to help "enterprising people get their Bitcoin business ideas off the ground" in an economy that, in mid-2011, was still mostly forum posts and faith.

It Tried to Become a Real Listed CompanyIt Tried to Become a Real Listed Company

IBB did not stay a curiosity for long. In October 2011 it listed on GLBSE, the Global Bitcoin Stock Exchange, one of the earliest attempts at a Bitcoin-denominated stock market, at 0.42 BTC per share, paying monthly dividends of about 0.0103 BTC per share. When GLBSE collapsed in October 2012 and took a chunk of the early Bitcoin investment world down with it, IBB migrated to Cryptostocks and kept the dividends flowing for a while longer.

A Small, Mostly-Forgotten FootnoteA Small, Mostly-Forgotten Footnote

There is little record IBB ever operated at meaningful scale or held serious capital, and activity faded out by 2013. It never became an institution, just a small experiment that proved, for a moment, that Bitcoin's first economy was already strange and global enough to need a halal version of itself.

Part of an ongoing series on Bitcoin history. This event falls on June 24, 2011. Source