Three Key Impediments to Governing Cryptocurrency and Smart Contracts within Muslim Countries

Abstract

In the world of increasing population with ever increasing strain on law enforcement agencies and judiciary, lack of imparting justice in time has become a major concern. The lack of timely justice has adversely affected the society’s ability to both administer and regulate public relations and affairs. In the middle of such concerns, Blockchain and Smart Contracts can play a pivotal role in managing society and ensuring a balance between criminal intent and legal sanction. Blockchain is a decentralized distributed framework where all nodes in the network collaborate on an equal footing to maintain necessary properties and functions. First introduced in 2008 via a seminal work ‘Bitcoin,’ the principles underlying cryptocurrency have shown immense potential. As of 2023, Blockchain is an institutional technology reshaping the current internet (web version 2.0) forcing it to evolve to web 3.0. It is the basis of ‘smart contracts,’ ‘distributed applications,’ ‘token economies and ‘decentralized autonomous organization.’ This paper dwells on two such applications, namely, cryptocurrency and smart contracts wherein we explain the technologies while highlighting legal challenges and open questions which need significant attention.