Introduction to Money Transfers: Traditional Banks vs. Blockchain
Cross-border money transfers are a fundamental part of the global economy, amounting to trillions of dollars annually. Traditional banks charge high fees, often 7-12% of the transferred amount, especially for small transfers, and take 3-5 business days for settlement. In contrast, blockchain offers near-instant transfers at a much lower cost, with network fees ranging from a few cents to around $1. But what is the real total cost when applying Islamic finance principles?
Costs of Traditional Bank Transfers: Hidden Fees and Riba
When transferring via banks, multiple fees apply: fixed transfer fees ($10-50), exchange rate markups (typically 2-5% extra), and intermediary fees. Moreover, banks rely on interest-based lending (riba) to fund operations, which is prohibited in Islam. The total cost can exceed 10% of the sent amount, burdening Muslims who need to send zakat or support family. According to the World Bank, the average cost of sending $200 globally was 6.4% in Q1 2023.
Costs of Blockchain Transfers: Transparency and Speed
Blockchain networks like Ethereum and Base operate without intermediaries, reducing costs: gas fees on Base range from $0.01 to $0.10 per transaction, up to $1 during congestion. There are no hidden exchange rate fees because stablecoins like USDC are pegged 1:1 to the dollar. Transfers take minutes (3-5 minutes on Base) regardless of amount. This fulfills the Islamic finance principles of 'no gharar' (transparency) and 'no riba' (no interest).
Direct Comparison: Sending $1,000 USD via Bank vs. Base
Consider sending $1,000 from UAE to Egypt. Via bank: transfer fee $25, exchange rate spread 2% ($20), total $45 (4.5%), taking 3 days. Via Base (Qist): gas fee $0.05, no exchange spread (USDC), total $0.05 (0.005%), completed in minutes. Even with Qist's 2% fee on financing (for installment sales), the transfer itself costs less than 0.01%. The difference is huge: 4.5% vs. 0.005%.
How Qist Implements This
Qist is a decentralized Islamic finance platform on Base, enabling transfers via USDC with full transparency: no hidden fees, no riba, no gharar. The contract is open source and verified on BaseScan, and surpluses (in financing) are returned to users per the 'surplus refund' principle. To transfer, simply deposit USDC into a connected wallet and specify the recipient. Transfer cost: only Base network fees (a few cents). The instant transfer experience is available now.
