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Bitcoin and Microfinance in Indonesia. How an Entrepreneur Uses Bitcoin for Positive Change in Indonesia.

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Assalaamu Aleikum everyone! Very excited to have Matthew J. Martin, founder of Blossom Finance, visit us here at Islam and Bitcoin. Join me as I interview Matthew and learn how he is using Bitcoin to create positive change in Indonesia.

Watch the video or read below.

Video Transcript

Gratitude Brings Opportunity

Andre Rishi: All right, Bismillah-ir- Rahman-ir-Rahim. As-salamu alaykum wa rahmatullahi wa barakatuh. Today, I would like to welcome Matthew J. Martin to the Islam and Bitcoin Podcast. How are you doing Matthew? Thank you for coming on and nice to have you on board.

Matthew J. Martin:  As-salamu alaykum. Thank you for having me, a pleasure to be here.

Andre Rishi: Hamdullah. So, today we want to learn about you a little bit about your background and this really interesting company that you have called Blossom. We’d love to get into that. But first, you know just wanted to get a little bit of background and if I remember correctly, I did read some articles on you some time back and I remember your work history is really interesting.

Like I remember you told a story where you worked at Home Depot like back in the day and you ended up providing excellent customer service to this one guy who came in and this guy ended up owning, I believe it was an electronics company and he gave you what you said is your big break.

Matthew J. Martin: That’s right.

Andre Rishi: And you actually left Home Depot, went there, worked in a warehouse for a while. And then from there, that’s when you transferred into like software, writing code, software engineering but were you always doing that?

Matthew J. Martin: Yeah, that’s right. So, you know as we know from the glorious words of the Quran Allah, subhana wa t’ala, says, “To those who are grateful, We will give more.”

Andre Rishi: Hamdullah.

Matthew J. Martin: Right. And SubhanAllah it’s very true. So, I– my amazing opportunity came when I was inspired actually by the Bible by the Injeel to be thankful for the work that I had, the work that Allah subhana wa t’ala had provided for me as part of my rizq as part of my income.

And it was in period in my life where I was obviously working at Home Depot is not something most people aspire to. It was not the most glamorous job. But because of my gratitude I decided to make, to have the intention, the niyyah (intention) to do the best and most excellent work possible in the position I was given.

And it just so happened that that very day I made that intention, someone came in and recognized my attitude and eventually hired me for his electronics company. His name is Allen Burdick, founder of Benchmark Media Systems. They provide the high-end audio electronics. So, that was my foray into the tech world.

Andre Rishi: Ok.

Matthew J. Martin: And it all bec– it all came out of gratitude SubhanAllah.

Andre Rishi: SubhanAllah. True indeed. True indeed. And when you were working there, did you do any like coding or software engineering there at all?

Matthew J. Martin: Absolutely. And not initially, the first I would say maybe three to six months, I did basically menial labor. So, I started out building boxes. They were going through a period of expansion I like assemble shelves all sorts of just basically whatever they had me do I try to do it with a smile on my face. Eventually got into assembling electronics, testing electronics and then later, general manager recognize that you know there is potential for me to do other things namely writing software because I was also studying software.

Andre Rishi: Ok.

Matthew J. Martin: And they needed some hands to write some software. So, that’s how I got my break into software.

Andre Rishi: Cool, cool. And how did that transition itself into like e-commerce because your company now deals with finance in the tech world really. So, how did you make the transition with e-commerce and at that time when this was going on, were you Muslim already?

Stepping into the Tech World 

Matthew J. Martin: The position I just mentioned, my foray into, into the tech world I was not Muslim. I became a Muslim in 2010.

Andre Rishi: Hamdullah

Matthew J. Martin: So, I started working in the tech world about 2004, I think 2004.

Andre Rishi: Ok.

Matthew J. Martin: So, it’d be all about six years in the tech world before I embraced Islam. So, your question was oh how did I make the transition into financial services? So, just to be clear in terms of terminology, generally, when people refer to e-commerce they’re talking about selling a physical product online.

Andre Rishi: Right, right.

Matthew J. Martin: Finance is more the business of providing capital for a project.

Andre Rishi: Ok. Ok.

Matthew J. Martin: So, they are two different sorts of areas. And financial services broadly is any product that deals with the management of money, the movement of money, the providing of capital. Financial services is a broad umbrella term. So, underneath financial services, you have things like paying and processing which is like Stripe, you have crowd funding, you have you know credit card processing like Visa and Amex. So, it’s a whole array of things in that…

Andre Rishi: PayPal, all that…

Matthew J. Martin: PayPal absolutely, money transmissions so that’s enabling people to send money overseas or send money to their loved ones like Western Union.

Andre Rishi: MoneyGram.

Matthew J. Martin: So, MoneyGram exactly, that’s another example of money transmission. So– or money remittances is also called. So, I was working, I started in electronics and consumer electronics working at Logitech and I really, to be honest, what facilitated the transition was I got really tired of working really hard every year before Christmas to put our product on the shelf just for Christmas that’s going to go in a landfill in a year or two years.

Andre Rishi: Right, right.

Matthew J. Martin: So, I really felt like I was sort of on this treadmill and it’s like, what’s the point, it’s very useless to just you know– and then there’s like the electronics world there’s rare earth, there’s– I mean some of its conflict minerals they’re going to it and the company is they’re kind of like, “Well, there’s nothing we can do, it’s really hard.”

So, we can’t give you any assurance that the product you’re working on is you know essentially slave labor. So, let’s just you know, it just resonated really negatively with me and– this is all before Islam.

Andre Rishi: Mm-hmm.

Matthew J. Martin: But I just felt you know I want to– I love software, I really, really love software. I wanted to do something in the pure software world and then maybe move away from hardware. Because that gets you out of the cycle, the Christmas cycle, right? Potentially…

Andre Rishi: So, just pure programming, just straight programming, you love coding then.

Matthew J. Martin: Exactly, yeah. And something specifically that would help people or it’s a product that was providing a fundamental valuable service. So, I said, I don’t want to do– I mean advertising provides a valuable service but I– and that wasn’t really for me.

So, I decided I didn’t want to do advertising. I didn’t want to do social media. I want to do something that provides a more concrete fundamental value to society and that’s how I got in the financial services.

Andre Rishi: Nice, nice. And let me ask this so, on that journey, when did you hear about Bitcoin? And when you heard about Bitcoin did you get it? Meaning like these are…

Matthew J. Martin: Yeah, it’s a great que…

Andre Rishi: Ok.

His First Bitcoin Business 

Matthew J. Martin: It’s a great question. So, around I think 2009, I was working for a mobile payments company called Boku. So, I was– me and my other colleagues read the financial tech press because we worked in that world.

So, we became aware of Bitcoin very early on because it was in the financial tech press and the tech press in general. And before that, I had also become very disillusioned with the monetary system, this 60 or 70 year old experiment with non-convertible fiat money with basically money that has no backing or no intrinsic value.

So, I was a silver bug, I had been collecting silver as a hedge against inflation which worked out with varying degrees of success but– so I was already very tuned into the idea of sound currency and then again this is all before Islam. This is before I embraced Islam.

And then when Bitcoin came about, I was like, “Wow! This is great! Someone has figured out a way to do mathematically- backed currency that’s instead of asset backed, it’s backed by math and a proof of work.”

So, I thought it was a great idea but in those days it was let you know it was trading at less than a penny. So, it was just sort of an experiment. I did buy some bitcoin. I think it was less than $10, I don’t know if it was less than $5 but it was in the very early range. I made a little bit of money, not a lot, you know a few thousand dollars.

But I ended up launching a Bitcoin business selling bitcoin basically allowing people to buy small amounts of bitcoin using just their mobile phone, a way to buy really small amounts of bitcoin just to try Bitcoin.

Andre Rishi: What was that app called? What was that app called

Matthew J. Martin: It was called Bitcoin by Mobile.

Andre Rishi: Ok.

Matthew J. Martin: So, the idea is if you’ve heard about Bitcoin, you’re like the question especially in those days was, “Where can I buy it?” Now, this is before a Coinbase existed.

Andre Rishi: Mm-hmm.

Matthew J. Martin: And especially certainly before Coinbase was as easy to use as it is now. They had the like a checking account and all the stuff. So, my solution, allowed people to buy bitcoin in under a minute and have their first bitcoin, fractional amount of bitcoin in under a minute. And the purchase is charged to their mobile phone.

Andre Rishi: Did it do well? I mean did you have a pretty good audience? Or…

Matthew J. Martin: Yeah, it did. The problem with that business is mobile phone companies pay you on a very long time scale. They pay you on a 30, 60 or 90 day receivable time scale. So, I’m basically giving people bitcoin and then I’m waiting 90 days to collect the money from the bitcoin that I sold them which is just a really, really long time.

So, you need a lot, you need to put a lot of– it was very successful in the sense that I couldn’t keep up with the demand because I needed you know, I need the operational cash to fund the business. So, yeah, well, I would say it’s very successful. I made a little bit of money at it, Hamdalah.

But ultimately I realized– it highlighted a bigger problem. So, after I became a Muslim you know then I had this business and it’s like, Ok, well, how can I finance the money that I need to keep this business going? You know it was a very profitable business but I need money. How can I finance it?

And all my advisers who were non-Muslims said we’ll just get a loan, get an operational line of credit. And I knew in Islam I couldn’t get a line of credit, I couldn’t do something or sign a contract that has riba, has interest associated with the contract. I knew that wasn’t allowed but I didn’t know what was allowed, what are the preferred modes of Islamic finance. What does Islam say about finance? And what should you do as a Muslim? And so, I asked…

Islamic Finance and Bitcoin

Andre Rishi: Let me just ask you real quick. So, when you came into Islam…

Matthew J. Martin: Yes.

Andre Rishi: Like what was the time frame of you coming in to hitting this point now like I’m, I guess I’m trying to figure out how much time that you have to even learn anything about Islamic Finance.

Because it seems that when you come into Islam, and then becoming consciously aware, “Oh, I need to do things the correct way.” You know that creates definitely a bump in the road and what were the challenges in learning– in learning what you need to know in regards to Islamic Finance, as you say, in regards to Bitcoin even more so cryptocurrencies.

Matthew J. Martin: Yes. So, the question is what were the challenges? What were the bumps on the road?

Andre Rishi: Yeah.

Matthew J. Martin: I mean the challenge is, I think especially in America, there’s a lack of– there’s a general lack of scholarship in the topic of Islamic Finance. I mean Islamic Finance is a term, it’s an industry term. It’s less than 100 years old, right?

When you compare to conventional western banking which is you know many hundreds of years old at this point. So, in general, the Islamic financial economy is immature compared to conventional finance. And as a result, there’s a less of a lack of– excuse me, less of a lack of scholarship and less of a lack of readily available resources, right?

Like if I want to go, if I have a question about fasting. I can very easily search and I get some very good, clear scholarly opinions hadith that support it.

Andre Rishi: Right.

Matthew J. Martin: It’s not that easy with not just Islamic Finance but the principle, the fiqh (understanding of Islamic law), the “fiqhy” principles of business in general.

Andre Rishi: Right.

Matthew J. Martin: The essentials of contracts in Islam. What is a valid contract? What is not a valid contract? All those types of things, in general, they are harder to just quickly get that information. And I feel like we, as a ummah, especially in America, we really suffer from that because the deen (religion) does not just encompass ibadah (worship), right? It’s a whole life system.

Andre Rishi: Right.

Matthew J. Martin: So, all our dealings every day, we have to deal in a halal way with every person that we deal with and we interact with whether it’s buying something from someone or it’s making our salat.

Andre Rishi: Mm-hmm.

Matthew J. Martin: Both of those things there’s– there is a right way to do that and we need to be aware of that as Muslims. And I feel like unfortunately in the west, especially often too much attention is focused on acts of worship and not acts of daily life which is unfortunate because as Muslims we should be the best example of beneficial, productive upstanding members of society.

And a lot of that involves day to day business and day to day transactions which falls on to the thick of business.

Andre Rishi: I agree.  I agree. I actually think that as Muslim, we should actually the leaders in the financial sector, in health care, in energy, utilizing Islamic knowledge for the betterment of humanity in those different fields.

Subhan Allah we have like a lot in common. Even for myself, I came into Islam in 2010. I heard about Bitcoin in 2012. I didn’t get it right away, you know I was working on some apps with a brother of mine, two of my brothers actually.

One of them is a coder and we were working on developing some apps and I got to a place where I also after really discovering, you know as we discovered, we learn how this economic system works.

Matthew J. Martin: Yes.

Andre Rishi: Fiat based, riba backed currency. You know I– it’s funny because you said you got into silver, I was more drawn to gold. So, I was trying to find ways…

Matthew J. Martin: I don’t have enough money for gold. [Laughter] That’s why I got into silver. It’s just cheaper.

Andre Rishi: Not like I had it much on me anyway. I actually– what I wanted to do with at the time was I wanted to find a way to develop an app that would allow people to exchange value using gold, buy goods and services and whatever with gold, by using an app.

But I wanted to do it in a way where we wouldn’t have to store the gold, we wouldn’t have to hold it. Different depositories could but our app would facilitate the exchanging of gold. I couldn’t really figure out a way to do that. My brother, one of- my youngest brother, came to me and said, “Oh what you want to do that’s pretty much already done.” And I said, “What are you talking about?” He says, “It’s called Bitcoin.” I said, “What?”

So, I went and I looked it up, looked at it, checked it out, and didn’t get it. I probably put it down, didn’t come back to it for some time later. And when I did revisit it just like you’re saying, I actually had went out and tried to investigate with a particular scholar, right?

And scholars out there. And to no avail, a lot of them just simply didn’t know anything about it at all. So, I think…

Matthew J. Martin: Yeah, and I don’t think that’s a discredit to them.

Andre Rishi: Not at all.

Thoughts on Bitcoin

Matthew J. Martin: I think Bitcoin is a very complex technology. It’s a game changing technology. Just like the internet if you said, “How does the internet work?” There’s a lot going on there, there’s so many technologies stack upon each other that actually make it work and make what we’re doing right now possible.

Andre Rishi: Right.

Matthew J. Martin: So, you know, it’d be like going to a scholar and saying, “Is TCPIP halal?” They’re going to be like…

Andre Rishi: What?

Matthew J. Martin: What? Exactly. But if you say, “Is video chat halal?” You know? So… But bitcoins at that level where it’s like protocol level where it’s really, yeah, it’s– I don’t think it’s necessarily discredit to scholars– I mean there are scholars giving fatwa that don’t make sense about social media because they don’t understand it.

Andre Rishi: Right

Matthew J. Martin:  Because they have the best of intentions but sometimes they’re old, they don’t– they’ve never used it and they don’t understand it so it’s hard for them to have a context.

Andre Rishi: I agree, I completely agree. So, let me ask you, so now you’re learning about Bitcoin, digital currencies, how did Blossom come about?

Birth of Blossom Finance

Matthew J. Martin: Yeah. Blossom, so as I mentioned I had this need for financing so this put in the back of my mind that there– so in that research you know, after I have learned about different sharia-compliant modes of financing and preferred mode of financing in Islam, I said Ok, well, where are the companies providing those products for small businesses?

I found there really aren’t any. There really aren’t any. So, I had in the back of my mind where– wait a second, there’s a lot of Muslims in the world and you know they probably need financing. There’s a lot of small businesses owned by Muslims like that’s probably an important problem to solve.

So, I was actually in an incubator business, incubator program for the startup that I mentioned with a brother of mine. It’s called The Boost VC which is a venture capital incubator program focusing on Bitcoin, virtual reality and I think they do some other things now, bots maybe.

Andre Rishi: Ok.

Matthew J. Martin: So, they’re like a niche specialty incubator so they focus on specific categories. So, this case it was Bitcoin. And that venture didn’t work out, we realized probably the business we got into the incubator with wasn’t something that would scale and there were some conflicts with my co-founder.

So, I decided to close down the business and call it a day. But I had this other idea in the back of my mind, hey, there’s a way more high quality problem that needs to be solved. I’m probably the right person to do that because I have this background in financial technology, in building financial tech that scales to millions of people and tens of millions of people, right?

Andre Rishi: And you’re a Muslim.

Matthew J. Martin: And I’m Muslim. Right? So, I have a passion for it. So, I told the– so we didn’t take the money from the investors, from the incubator. We gave them a check back and said, you know we just decided to split up as founders but I said, “Hey look, I have a different idea.

Give me a week, I’ll come back with the demo and a business plan and let me pitch you and I want you to invest in this other thing.” So, they were like, “Ok”, I was like very mysterious about it. And I came back and a week later, gave them a demo and gave them you know, pitch in the idea and then said, “Yeah, we think this is good. We’ll invest in you.”

Andre Rishi: And this is Blossom.

Matthew J. Martin: This is Blossom, that’s right.

Andre Rishi: Ok, so tell us what is Blossom?

Matthew J. Martin: So, Blossom makes it easy and profitable to help eliminate poverty. The way we do that is we collect capital internationally and we deploy that through profitable microfinance in Indonesia. Microfinance means giving entrepreneurs who create small businesses a very small investment but that’s meaningful enough to help them grow a business that provides a livable income.

Andre Rishi: Ok. So, when we talk in US $, $300, $500, $1000

Matthew J. Martin: A lot of times even less than that.

Andre Rishi: Wow.

Matthew J. Martin: So, the average investment that the end beneficiary receives through our platform is about $150, $154.

Andre Rishi: Wow!

Matthew J. Martin: Yeah. But with that money, with the $154, they are able to create a sustainable business that generates a livable income. A lot of– so just some examples of businesses we helped start or help grow, everything from newspaper businesses, retail stores, restaurants…

Andre Rishi: Wow!

Matthew J. Martin: …mechanics, all sorts of things like that. Usually, it’s usually service-based business.

Andre Rishi: It’s very diverse by field.

Matthew J. Martin: Yes.

Andre Rishi: Diversified fields. So, let me ask you then, then since you said it’s you’re providing you know capital funding to entrepreneurs in Indonesia, is the company itself based in Indonesia? Or are you based in the United States?

Matthew J. Martin: No, Blossom is a Delaware corporation. We’re based in the United States. And so far, that’s where all our capital has come from is investors based in the United States.

Andre Rishi: Ok.

Blossom Finance is Microfinance

Matthew J. Martin: We use a network model so we don’t actually invest in entrepreneurs directly. We believe just you know in terms of the entrepreneurship model. There are people in Indonesia and all over the world doing what’s called Microfinance as entrepreneurs essentially creating small halal banks, sharia-compliant banks in their communities.

So, these are people who are connected to the local community. They have local knowledge, they know the local people, they know who is credit worthy, who’s not credit worthy. They understand the right parameters for underwriting and investment.

We partner with them and we deploy our capital through those microfinancing institutions. And they ultimately decide who the end beneficiaries will be, who the end recipients of the money will be. So, we don’t dictate we don’t invest directly in entrepreneurs. We invest in an institution in a community that invests in individual entrepreneur.

So, we craft the overwriting, underwriting parameters like we can say for example, “Well, in your area, we like to invest only in agriculture.” Or “We’d like to invest only in women-led businesses.”

Andre Rishi: Ok.

Matthew J. Martin: Whatever the criteria are, we specify those at a high level and then we leave it up to the microfinance institution to do execute the end financing with the beneficiaries. And ultimately, that model is better for the entrepreneurs because if you’re someone who’s running a corner store or you run a restaurant, you don’t have time to go stand in line in a bank to make a payment.

Andre Rishi: Mm-hmm.

Matthew J. Martin: Right? To pay back to your investors.

Andre Rishi: Mm-hmm.

Matthew J. Martin: So, it’s a lot better because on the ground there, they actually go and visit each of the, each of the businesses individually every day.

Andre Rishi: Ok. And how was Bitcoin coming into play with the end user? Or is it not? Is it just between the financial institutions, the end user is just getting the currency, in their local currency.

Matthew J. Martin: That’s correct. We– all the investments and the beneficiary side are in local currency so in Rupiah. We use Bitcoin as a vehicle to move money internationally very quickly and very capital efficiently. So, we can basically take an investment from an investor in the USA, move it overseas into Indonesia, deposit it into any Indonesian bank account in about two hours, two to four hours.

Andre Rishi: Wow.

Matthew J. Martin: Yeah.

Andre Rishi: Wow, that’s ridiculously fast, man.

Matthew J. Martin: Yeah, and it costs us less and generally the cost for that is you know it’s below 2% which is a lot less than what you will be charged if you did a bank-to-bank transfer. It’s a lot less than if you did like Western Union.

Andre Rishi: Quite expensive, yeah.

Matthew J. Martin: Yeah.

Andre Rishi: Yeah. They do charge– I’ve experienced that myself and they charge crazy amounts for that. Now, what has the reception been like with utilizing bitcoin in Indonesia? Like the government, with the government specifically in banks.

Bitcoin Regulation in Indonesia

Matthew J. Martin: Yeah, Indonesia, so, in terms of regulatory approach, Indonesia is generally what’s considered a bottom-up approach. So, Indonesia– whereas Malaysia which is a similar, you know, it’s Muslim dominated market.

Malaysia is very much a top-down model where the national bank or Bank Negara of Malaysia specifies criteria and then it sort of this top-down government model, whereas Indonesia is much more grassroots.

Andre Rishi: Mm-hmm.

Matthew J. Martin: So, Indonesia’s guidelines so far in Bitcoin has been, we understand Bitcoin exists, it’s highly speculative, consumer should exert extreme caution when investing in this speculative new asset class.

That’s essentially been the regulatory approach so far from the Indonesian government. Obviously, all the other regulations apply but there’s nothing special about Bitcoin as far as the Indonesian government is concerned.

Andre Rishi: Ok. And I guess that the end users, who are funding their businesses, are they even aware that Bitcoin is in the background of this whole thing? Or probably not even?

Matthew J. Martin: No, not at all. Not at all.

Andre Rishi: Ok, all right. So, by chance you wouldn’t even– do you have any idea of what, what’s the– I guess the word on the street in regards to Bitcoin in Indonesia if people even really– what do people know about it over there? If they know anything at all

People’s Knowledge of Bitcoin in Indonesia 

Matthew J. Martin: It depends I mean it depends in what circles you travel, right? If you travel in you know tech circles, obviously, people are going to be aware of it. Among the middle class with disposable income who are maybe interested in highly speculative investments there are probably some awareness.

But just to give you an idea in terms of how attitudes have changes, a little more over a year ago when I first went to Indonesia, I had a conversation with someone experienced in the microfinance there and I mentioned Bitcoin is part of our you know out technology. And they said, “Oh Bitcoin, isn’t that a multilevel marketing scheme?”

So, complete, you know they just thought, oh, Bitcoin sounds like a scam or they thought it was some multilevel marketing. And then I was like, I was very confused, I was like, “Wait, how does multilevel marketing play in this, I don’t understand.”

But there are– Bitcoin Indonesia are for example which are for example which is our partner in Indonesia to serve us the payment side of what we do. They have been a fantastic local partner and they’re very reputable, very excellent customer service. So, the infrastructure is there in Indonesia to do things with Bitcoin.

Andre Rishi: Ok.

Easy to Buy Bitcoin in Indonesia

Matthew J. Martin: You can go to essentially the equivalent of 711 over there Indomaret and also Alfamart or Alfamidi. So, those are the two big Alfamidi and Indomaret are the two big corner stores which in most places you can find them all over the place.

So, you can go to those stores, you can make the cash payment and actually put money into Bitcoin, buy bitcoin using cash.

Andre Rishi: Get out of here.

Matthew J. Martin: You can also– I mean using bitcoin in Indonesia, you can– it’s pretty easy to move money in and out of Indonesian bank account. So, the infrastructure is pretty developed I would say in terms of Indonesia.

But in terms of general awareness, it depends– it depends who you talk to. But yeah, I mean Indonesians are in general a very, especially in urban Indonesians are very tech savvy, they’re used to using apps like GO-JEK which is essentially Uber for traditional scooter taxis. So, yeah, so I would say there’s certainly a growing awareness about Bitcoin.

Andre Rishi: Wow. Wow. That’s nice, man. And I guess at the same time too it must be good to definitely to some degree to like you said, be providing a service that is actually really is beneficial to humanity and to do so in manner that is halal by and large.

Have you had to have any discussions with any Islamic scholars in regards to setting up your business especially since it is in finance and it is with bitcoin?

Matthew J. Martin: Yes, so I mean you always want to be having in dialog with scholars, right?

Andre Rishi: Mm-hmm.

Matthew J. Martin: The structure that we used– so again, we used bitcoin as a wire and we’re not originating contracts in bitcoin. Bitcoin is essentially just the tool we use. So, the sharia overlap with Bitcoin in terms of what we’re doing. It does not really– there’s no sharia implication to the fact that we’re using bitcoin. It’s like– it’d be like using Western Union for us, right?

Andre Rishi: There are no contracts.

Matthew J. Martin: Yeah, there’s no contracts stipulated in bitcoin. We’re not holding bitcoin balances. So, I mean yeah, there’s really nothing in terms of the sharia that overlaps with our use of bitcoin per se.

In terms of the sharia principles we invest using, our contract are quite clear so we use a mudarabah (sharing of profit and loss) agreement with our investors which is a profit sharing arrangement. So, our sort of model is a lot simpler than maybe some other models.

How to Invest in Blossom Finance

Andre Rishi: Right. Right. Now, what is somebody like let’s say, me, what if I wanted to invest, you know I wanted to put capital in, invest in there and see if you know insha’Allah maybe I can make some profit for myself by helping somebody out. How do you even go about that? How does that. How does somebody go about that?

Matthew J. Martin: So, yes, so we haven’t launched publicly, we’re still running the service privately. We intentionally have not opened this service for anyone to invest for a variety of reasons. So, today, you can’t do that. We…

Andre Rishi: Man!

Matthew J. Martin: Yeah. That’s right. That’s right. So, Blossom, based– the way we’re structured. We only allow credited investors. So, to invest using Blossom platform, you have to either have income in excess of 200,000 per year or assets exceeding 1 Million not including your primary residence.

And that’s basically because of US Securities and Exchange Commission regulations that stipulate that based on the way we structure things that’s the way things are right now. So, if we did open things up publicly which we will, we plan to in the future. We haven’t announced a target launch date yet but when we do, it will be for accredited only investors.

Andre Rishi: Ok.

Matthew J. Martin: So, we hope to expand that in the future, Insha’Allah but as of now, there are no plans to go beyond accredited investors.

Andre Rishi: Insha’Allah

Matthew J. Martin: Within the US.

Andre Rishi: Within the US?

Matthew J. Martin: Yeah.

Andre Rishi: I think you definitely would have a lot of Muslims in the United States, in the Western hemisphere that would love to be able to invest in a business like this, in a project like this for sure, for sure.

Matthew J. Martin: Yes.

Andre Rishi: Now, aside from…

Matthew J. Martin: And to be clear, we don’t position ourselves as a Muslim platform. We’re very focused on maximizing the amount of capital that we can bring to create businesses.

So, you know our messaging is around ethical finance more so than sharia finance, right? Our principles are– our principles and our products are 100% sharia but you know we believe that the strong ethical component to what we do is attracted not just to Muslim but to broader audience.

Andre Rishi: I agree. And since you know, Islam is a universal religion, it applies to all. So, I mean that’s…

Matthew J. Martin: That’s right.

Andre Rishi: …an extremely wise business move. Now, aside from everything, the legalities of the regulatory system on the Indonesian side, what have you been dealing with? What is Blossom been dealing with here States side in regards to regulations, has it been a challenge? Has it been easy? Has it been getting easier, harder, what are you experiencing especially since you’re dealing with Bitcoin?

Matthew J. Martin: So, specifically related to Bitcoin, again because we’re not selling, so because we’re not selling or trading in bitcoin, it’s not really– like we’re not a service provider that’s…

Andre Rishi: I see what you mean.

Matthew J. Martin: …providing service rate.

Andre Rishi: It’s not storing, you’re not storing. You’re not holding…

Matthew J. Martin: We’re not storing it. We’re not selling it. We’re– the key regulations for us following their securities regulations so that’s somewhat difficult and expensive to navigate that landscape.

But so you know broadly for companies doing crowd funding, you can consider what we do is a type of crowd funding, right? Crowd funding recently got a lot easier because of the 2013 Jobs Act that was put into place, I believe it was 2013. The Jobs Act is like a jumpstarting Our blah blah blah you know some acronym.

There was a crowd funding provision in there that’s designed to make doing crowd funding for businesses a lot easier. So, it carved out specific exemptions for sites that want to be crowd funding sites to do things like equity crowd funding or debt crowd funding.

Unfortunately, those rules only apply for businesses organized in the United States. So, the fact that the entrepreneurs that we’re helping to start businesses are outside of the US, those rules completely don’t apply to us or make anything easier for us. And that’s why we only allow accredited investors.

Andre Rishi: And you found a good way to get around all that so that’s a…

Matthew J. Martin: No, it doesn’t apply to us, it does not.

Andre Rishi: Right. Right. Right. I was saying you found a good way to– when I say get around, I mean the way you setup your business, you don’t have to put with the hassles like a Coinbase does or anything like that.

Matthew J. Martin: Oh, oh you mean related to Bitcoin.

Andre Rishi: Yeah. Yeah, related exactly related to Bitcoin. You don’t have to worry about those things and again, I guess the primary reason being is because you don’t, you’re not storing it. You’re not storing it and you’re – I can see not selling, you’re not selling it per se. You’re using it as a…

Blossom Finance Uses Bitcoin Under the Hood

Matthew J. Martin: Yeah, we’re not– again, Bitcoin for us is essentially a payment mechanism under the wire.

Andre Rishi: Right, right.

Matthew J. Martin: So, consumers on either side of the product don’t interact with Bitcoin. We don’t offer any products, any Bitcoin related products. Bitcoin is it’s the same is like, if you have a bank account and you sent money to someone else using your bank, the fact that there’s what’s called ACH under the hood, you’re not buying some product related to ACH, your bank is using an underlying technology to move money.

Andre Rishi: Right.

Matthew J. Martin: Similar to you know if you use– send money via Western Union or something like that. The Bitcoin is a technology under the hood that helps us do what we do a lot more efficiently.

Andre Rishi: SubhanAllah very nice then. Now, you guys are you still by yourself or you partnered up? Or it’s still…

Matthew J. Martin: What do you mean by partnered up?

Andre Rishi: You said, because Blossom I believed you founded all on your own, right? You mean it’s yours.

Matthew J. Martin: That’s right. I’m the sole founder. I would say I’m only person that’s full-time. We do have a small team mostly based in Indonesia.

Andre Rishi: Ok.

Matthew J. Martin: But I’m the only full-time member technically on the books.

Future Plans for Blossom Finance

Andre Rishi: Ok. [Laughter] All right. And you know, so what’s the dream plan? You guys are looking to expand Insha’Allah beyond Indonesia? Or is your focus probably for the next two, three years, just to scale up in Indonesia itself or any countries?

Matthew J. Martin: Yes. It’s really the latter. So, Indonesia is a very big country. There’s a lot of opportunity there and I really believe with start-ups, the most important thing is to stay focused and not to get distracted.

So, Indonesia has 250 Million people. 80% of them lack access to traditional financial services. So, there’s several hundred million people left to help. Therefore I have been thinking about going to a new market.

Andre Rishi: Right. Have you– maybe I’m jumping the gun here so, have you given any thoughts at all about you know micro financing in the United States or whatever which in some I guess you can argue that maybe you can be hard to do that here just because of the economics thing is just way more expensive here.

So, I don’t know how micro financing would work in the United States plus the regulatory issues and all that so.

Matthew J. Martin: Have I thought about it? So, sure I mean I have thought about it. I think yeah, I think it’s sort of a– it’s a different business to do that here. And it’s not one that we have any plans to get into.

Andre Rishi: Right. Right.

Matthew J. Martin: It’s also just not I mean small business owners can go to a bank and take a loan. And if they’re not Muslim like why would they not do that? Right?

Andre Rishi: Mm-hmm. Right. Right.

Matthew J. Martin: There’s only like what? Three and a half million Muslims in the US even if let’s say half of them are small business owners, that’s not a big enough population to build a viable business on in terms of what we do.

And it’s not expensive to setup that type of operation here regulatory compliance and legal things and frameworks you need to have in place. So, it just be a big upfront capital investment with not– with something that you couldn’t scale very big just because of a limited, the limited need of demand for that type of service.

So, that’s why at least in the foreseeable future, we would never, never build that here. Actually originally, when I started Blossom, I had the idea to start in the US and I realized very quickly based on research that the opportunity here is just way, way too small. It’s just not enough people. And yeah, and yeah so.

Andre Rishi: Ok, not bad, not bad. I hear that. Now, let me ask you this. With your background being in the coding, and you discovering Bitcoin now the technology behind…

Matthew J. Martin: Like I said, discover Bitcoin. It sounds like– it sound like Christopher Columbus discovering America. [Laughter]

Andre Rishi: Or when you I guess when you met Bitcoin, you and Bitcoin met up.

Matthew J. Martin: Yes.

Bitcoin’s Ethical Compliance with the Sharia

Andre Rishi: Right? What are your thoughts in regards to the technology behind Bitcoin? And how that can be a benefit to either Muslims, how we can apply that with our own community or humanity at large.

Matthew J. Martin: Yeah. That’s a broad question.

Andre Rishi: And maybe– and maybe to say real quick, even the latter part of that questions humanity at large, you’re already implementing Bitcoin Blossom with the technology of that but I guess again, with the technology of Bitcoin, I’m sorry, the Blockchain technology behind it, how do you see that is being a benefit to Muslims?

Matthew J. Martin: Yeah, Muslims and the greater society. Yeah, so I’ll touch on two things. So, the first thing is, is openness. So, I really believe the part of the reason, so the internet existed for quite a while before things like AOL and Netscape and et cetera became large.

The internet started out as a private network of network government systems, universities and metro libraries linked up. And it was a private network, right?

Andre Rishi: Right.

Matthew J. Martin: To the extent that the internet became public network where anyone can join this network of servers. That’s really where the internet’s power came in terms of it being an open network.

Andre Rishi: Mm-hmm.

Matthew J. Martin: Bitcoin is an open network. Traditional financial services are a closed network. That means you have to be part of the club to join up.

Andre Rishi: Right.

Matthew J. Martin: So, part of the game changing power of Bitcoin, I would say is first that it has the potential for greater financial inclusion. Because it’s an open network, anyone with a $50 laptop can join this financial network and start moving money through the system. That’s powerful. That is absolutely game changing. So, the fact that it’s an open network I think that has transformative power.

The second thing you know you mentioned Blockchain so I’ll touch on that. The second thing I would say is the cryptographic ledger system is another, is game changing on many levels. So, from a sharia perspective, the money we use today is completely haram. It’s impermissible by any stretch of the scholarly imagination.

Andre Rishi: Right.

Matthew J. Martin: And there’s a lot of people asked, is Bitcoin halal or haram? Which I think is the wrong question because no one asked first like everyone– no one is asking the question why are we using haram money?

Why are Muslim countries still issuing haram money? Why aren’t they issuing halal money? Which scholars agree as halal? Why are they doing the same thing Western government do, in issuing nonconvertible fiat money? That doesn’t make any sense.

At the worst, Bitcoin is– eliminates the haram that you find with usurious bases money. Where there’s riba inherent in the system. So, I’m getting off topic, I’m touching on some things…

Andre Rishi: No, no, no. Go for it, man.

Matthew J. Martin: Yeah, I’m touching on something entirely different. So, you know a key principle in the fiqh (Islamic jurisprudence/understanding) of money is hand to hand. You can only sell gold or silver or things that qualify as money that you actually have.

You can’t– you can’t sell something– in general, you can’t sell something you don’t already have. But that’s not really the way the world’s financial systems work. They work on margin and they work on fractional reserve.

With Bitcoin, to transfer value in a Bitcoin system, and I’m not talking about derivative system you could build on top of it but the essential system of Bitcoin, you have to have ownership over the bitcoin to transfer that value.

Andre Rishi: Right.

Matthew J. Martin: So, Bitcoin offers 100% mathematical certainty of the ownership of the underlying assets. So, ownership of the underlying assets is a key component of the sharia, in terms of sharia of money in business.

So, that’s good. That’s a very good thing. And I think from a broader ethical perspective, that can help reduce some of the over leveraging that the world saw that cause things like the 2008 financial crisis.

So, and then Blockchain and so it actually ended up being three things. So, related to Blockchain, so again going back to that proof of ownership. I think Blockchain kind of going out of tangent here, Blockchain in Muslim majority markets like Indonesia. Malaysia, GCC countries, North Africa.

Andre Rishi: Yes.

Using Blockchain to Fight Corruption

Matthew J. Martin: Blockchain has the potential to be used in a public sector to fight corruption. So, a lot of those places or jurisdictions where, you know, everyone talks about corruption.

Well, using Blockchain technologies, you can move a lot of public sector things into the Blockchain and you eliminate, at every level, you eliminate the possibility for corruption or for someone to be taking money out of the system to grease palms which is really powerful.

And do things a lot more efficiently. So, I think that’s a really interesting implication for Bitcoin. And not just in– I think it definitely applies to Muslim majority countries but also certainly non-Muslim majority countries.

Andre Rishi: Right.

Matthew J. Martin: …all over the world especially in the emerging economies. So, I think in the same way, mobile phones in many places in Africa leapfrogged landlines that those people went there were no landlines, people went directly to using mobile phones.

In the same way that in places in Africa the– and they had no commercial banks, no retail banks. They went directly to mobile money, right?

Andre Rishi: Right.

Matthew J. Martin: They completely leapfrogged commercial banking. I think in some emerging economies, Blockchain power public sector technology, Blockchain power, what’s called, Blockchain-backed government has the potential to leapfrog a lot of those conventional bureaucracies and institutions that we see in more developed economies.

So, I see that as a great potential benefit to society because we all want public sector that is more efficient and that is less corrupt. I don’t think– unless you benefit from corruption. The only people who would want that are the people who benefit from the corruption.

Andre Rishi: Right. If you’re a member the cartel, right?

Matthew J. Martin: That’s right. And there was not too long ago, so I think maybe four months ago, three months ago there was a big scandal in Malaysia where it turned out there was this mysterious payment, this out payment of at least US $4 Million.

But I think it was more like 40, they haven’t figured, they don’t even know how much money it was but it was at least $4 Million that just mysteriously went out, just from the government and it’s like you know it went into someone’s pocket.

And that’s the stuff that happens all the time in emerging economies and certainly the US too. But that’s more– corruption here is much more high level, much more high scale and much more…

Andre Rishi: And I shouldn’t…

Matthew J. Martin: …it’s in a totally different scale. It’s a totally different scale. So, I think Blockchain just to summarize, Blockchain has the power to make the public sector a lot more efficient and eliminate corruption from that system. And the first point that I want to reiterate is inclusion, it’s– it has the power to make things more inclusive where anyone can join up to the system with the right access points.

The Potential of Bitcoin in Muslim Countries

Andre Rishi: Right. Now, have you been able to travel throughout the Muslim world at all? Whether it’s the GCC countries, Malaysia, I know you’ve mentioned it in this talk here. Have you been able to travel throughout the Muslim world?

And if so, since you’re you know from a tech background, keep your ears open, what do you hear that’s going on out there in regards to whether it be bitcoin itself being used or just the technology behind it?

Matthew J. Martin: Sure. So, I have travelled quite a bit in Southeast Asia, mostly Indonesia obviously and then Malaysia, Singapore. In the GCC, I’ve been to the UAE and Bahrain. In North Africa I’ve been to Morocco and then Middle East in general. I’ve been to Turkey.

Andre Rishi: You’re a man of the world.

Matthew J. Martin: Thank you. Thank you, sir. Mash’Allah. So, North Africa there’s an interesting opportunity there because there’s no– Morocco just announced that they have approved the first Islamic financial institutions to open up in Morocco. So, Morocco, I guess, depending– and this going to be controversial. But depending upon who you ask, there are probably 40 million people in Morocco.

Andre Rishi: Ok.

Matthew J. Martin: Or more like whoever– depends on who you talk to.

Andre Rishi: Ok.

Matthew J. Martin: Since it’s a sizable country, it’s 98% Muslim, at least 95% Muslim. And there are no Islamic banks. There’s no Islamic financial products. That’s shocking.

Andre Rishi: Hmm. That’s very shocking.

Matthew J. Martin: That’s absolutely shocking. They are just– they just now, less than a year ago approved the fact that they will allow Islamic banks to come into the country. So, they don’t even exist yet.

Andre Rishi: So, you mean like right now, Western style baking is what’s there.

Matthew J. Martin: That’s the only thing you can do in Morocco is Western style banking.

Andre Rishi: Subhan Allah.

Matthew J. Martin: Completely conventional banking. There are not even any institutions in Morocco that exist as name only Islamic banks.

Andre Rishi: Wow!

Matthew J. Martin: So, 100% conventional in Morocco.

Andre Rishi: Wow. Wow.

Matthew J. Martin: Moreover, Moroccans, the average Moroccan, because banking and so and there are some cartel aspects to that because you know Morocco is a monarchy and the king has a hand in approving all banks that come into the country and has a stake in the banks.

Andre Rishi: Right.

Matthew J. Martin: So, there’s a lack of– it’s not easy for new players to come into that market to compete.

Andre Rishi: Right.

Matthew J. Martin: The average Moroccan does not have access to a debit card so they can’t buy products online. It’s very difficult to buy products online. So, e-commerce is incredibly underdeveloped in Morocco, in the rest of North Africa as well for that reason. That’s an interesting opportunity. Digital currencies like bitcoin and others could play an exciting role.

In terms of Bitcoin, in other places, so there’s a general, I think interest in Southeast Asia around Bitcoin and cryptocurrency. And a lot of these sort of banking conferences it’s always a topic, they always have at least one panel where you know we’re talking about Bitcoin or Blockchain but it’s still at a phase where banks are kind of looking at like scratching and they’re like, “Hmmm? What can we do that?”

Andre Rishi: Right.

Matthew J. Martin: They understand it’s going to be big but they don’t really know what to do with it. So, it’s definitely a topic of interest I would say. In the GCC…

Andre Rishi: That’s what I’m interested in there. I’ve gone back and forth from UAE, quite a bit actually.

Matthew J. Martin: Ok. Yeah, the GCC, I don’t know to be honest. My perception is that– like for example, I don’t even know, off the top of my head what the– who the Bitcoin player is in the UAE. What’s the biggest Bitcoin exchange in the UAE, I have no idea.

Andre Rishi: Right. I think it’s an Australian company called iGot or something like that I think, I don’t know.

Matthew J. Martin: Ok. So, yeah, so I don’t even know. So, you know I think and this is not a knock on the GCC but my perception is those countries will look outside for the trend and they’ll embrace cryptocurrency as it trends elsewhere.

That’s my perception but I could be wrong with that. In Turkey, honestly, I have no idea but I do know that some good strides are being made in terms of sharia-compliant banking financial products in Turkey.

Turkish Bank this last year at the Global Summit, the World Islamic Banking Conference, I forget the name, Turkish Bank won the award for Best Overall Islamic bank. So, Turkey is making great strides.

Andre Rishi: Ok, all right. And so, I was going to ask like two things. One I was going to you know come back and ask, since you, as a Muslim, starting Blossom and your knowledge of crytocurrencies, have you crossed paths with scholars who maybe will ask you questions in regard to it?

You know seeking knowledge so that they themselves can utilize that to help other Muslims who are interested in the topic?

Matthew J. Martin: Yeah, unfortunately I haven’t. I just don’t think it’s on the radar of enough scholars, yeah. But insha’Allah that will change in the future.

Andre Rishi: insha’Allah. insha’Allah. Well, that sounds really good man. Really good. So, what are the plans? Are you working on anything outside of Blossom? Any other startups in mind or especially when it comes to digital currency arena, crytocurrency?

Matthew J. Martin: If there are I’m not discussing them.

Andre Rishi: Ahh man, I couldn’t get that out of you. All right. Well, I definitely wanted to thank you. You’ve given us a lot of info. If we wanted to find you, where– what’s the best way to get in contact with you? What’s the best way to find out Blossom?

How to Contact Matthew and Blossom Finance

Matthew J. Martin: So, obviously the two best ways I’m on Twitter @ohbytheway that’s O-H-B-Y-T-H-E-W-A-Y, ohbytheway just like it sounds.

Andre Rishi: ohbytheway, Ok.

Matthew J. Martin: ohbytheway. You can catch me on Twitter there. Also, you can email me at

Andre Rishi: Awesome. Awesome. And again, I wanted to thank you for coming on the show and supporting the cause. Really were looking to make this podcast a benefit to humanity, you know really have this podcast where Muslims can come together with this technology to see how we can utilize the technology for the betterment of humanity. I think Blossom is you know is right up that alley man, so God bless you. You know, I’m just like pray that you continue to have success in your business that it blossoms.

Matthew J. Martin: Insha’Allah.

Andre Rishi: Blossoms, right? Love the idea of it. And blossoms even beyond Indonesia when the time is right Insha’Allah.

Matthew J. Martin: Insha’Allah.

Andre Rishi: I would definitely put information on the– your contact in the show notes here. And I just wanted to remind all the users, please don’t forget to you know signup for our mailing list. We always want to make sure we can keep you up-to-date on everything that is going on here. Please donate. Support the cause, please share us on Facebook, Twitter, wherever you frequent. And again, Matthew, thank you so much for being on the show.

Matthew J. Martin: You’re welcome.

Andre Rishi: As-salamu alaykum wa rahmatullahi wa barakatuh.

Matthew J. Martin: JazakAllah kheir, wa aleikum assalaam wa rahmatulah wa barikahtu.

Andre Rishi: Alhamdulillah.

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