Blockchain Papers

Alfi Fuadah

The rapid development of financial technology has introduced cryptocurrency as a transformative innovation within the global financial system, raising fundamental questions regarding its compatibility with value-based financial models, particularly Islamic banking. Grounded in Sharīʿah principles that emphasize ethical finance, risk-sharing, asset-backed transactions, and the prohibition of ribā, gharar, and maysir, Islamic banking faces both opportunities and challenges in responding to the emergence of decentralized digital assets. This study aims to explore how Islamic banking can engage with cryptocurrency while maintaining its normative and ethical foundations, as well as to identify the key constraints that limit institutional adoption within global finance. Employing a qualitative research approach, the study conducts a systematic and interpretive review of scholarly literature, regulatory frameworks, and classical as well as contemporary Sharīʿah sources related to Islamic finance, blockchain technology, and cryptocurrency governance. The analysis reveals that blockchain technology demonstrates substantial alignment with Islamic banking principles through its transparency, traceability, and decentralized verification mechanisms, offering institutional potential in areas such as payments, trade finance, and smart contracts. However, the findings also indicate that cryptocurrency markets are characterized by high volatility, speculative behavior, weak real-sector linkage, and fragmented regulatory oversight, which raise significant ethical, financial, and governance concerns for Islamic banking institutions. Regulatory divergence and inconsistent Sharīʿah interpretations further complicate cross-border implementation and scalability. The study concludes that Islamic banking should adopt a selective and principle-oriented approach to cryptocurrency, distinguishing between permissible technological infrastructure and ethically problematic market practices.

Muchammad Idham Cholid

Berikut ringkasan akademik dari tulisan “Bitcoin dalam Ekonomi Syariah: Tinjauan di Pasar Muslim”: Artikel ini mengkaji keamanan dan kepatuhan Bitcoin terhadap prinsip ekonomi syariah dalam konteks pasar Muslim, ditengah tren global kripto yang berkembang pesat. Kajian berangkat dari kebutuhan akan penilaian mendalam terkait kesesuaian Bitcoin dengan nilai maqasid al-shariah, khususnya keadilan, transparansi, dan kemaslahatan. Tujuan utama penelitian adalah mengevaluasi apakah Bitcoin dapat diadopsi dalam sistem keuangan Islam, dengan menyoroti aspek keamanan transaksi dan kepatuhan terhadap larangan riba, gharar, serta maysir. Penelitian menggunakan pendekatan mixed methods, menggabungkan survei kuantitatif dari pengguna Bitcoin di pasar Muslim serta kajian kualitatif atas literatur, fatwa, dan pendapat ulama. Hasil survei menunjukkan bahwa sebagian besar responden mengakui keunggulan teknologi blockchain dalam aspek keamanan dan transparansi, namun mengkhawatirkan volatilitas harga dan potensi spekulasi yang belum sesuai prinsip syariah. Analisis empiris dan wawancara ahli menemukan bahwa penerimaan Bitcoin secara syariah masih tergantung pada penguatan regulasi, pengawasan lembaga keuangan Islam, dan inovasi digital yang dapat mengeliminasi unsur spekulatif. Secara teoretis, penelitian berkontribusi dengan integrasi antara perspektif maqasid al-shariah dan analisis keamanan digital—memperluas pemahaman tentang potensi dan tantangan kripto dalam ekonomi Islam modern. Rekomendasi diberikan kepada regulator dan pelaku industri untuk mengembangkan instrumen kripto halal melalui smart contract, audit syariah, serta peningkatan literasi digital di kalangan masyarakat Muslim. Dengan landasan evidence-based dan pendekatan interdisipliner, artikel ini memperkuat wacana integrasi teknologi blockchain ke dalam prinsip keuangan syariah sebagai strategi inklusi dan inovasi di pasar global Muslim.

Lana AL-Khalaileh, Tareq Al-Billeh, Abdul Salam Al-Findi, Odai Al-Hailat

This study deals with a new technology in contracting, resulting from the information technology (IT) revolution in the field of electronic transactions, which is called “smart contracts”. The latter has constituted a breakthrough in the field of contracting since it provides automation, which underlies many advantages for contractors, so that the software works of smart contracts provide immediate and automatic execution of the contract, which provides speed of implementation and security from manipulation after concluding the contract. So, it provides elements of technical security and trust for this type of contract. This new contractual pattern is considered one of the first in the provisions of Islamic Sharia, which urges us to know the extent of its compatibility with its contracting system. The study concluded with several recommendations, the most significant being that international accords lack comprehensive legislation governing transactions executed through smart contracts. While they contain certain restrictions about contracts formed through contemporary electronic methods, they inadequately elucidate the characteristics of such contracts and examine their specifics. The legal issues associated with smart contracts stem from their connection to digital currency, which is banned by Sharia law.

Марат Рашитович Сафиуллин, Leonid Alekseevich Elshin, Yaroslav Kuznetsov

Objective: This study seeks to substantiate the prospects for using blockchain technologies as a mechanism to attract Islamic finance to the Russian regions, with the dual aim of mitigating sanctions-related restrictions and fostering integration into global Islamic financial ecosystems. Methodology/Approach: The research employs econometric and systems analysis to assess the macroeconomic externalities of blockchain-driven Islamic finance inflows. A methodological toolkit was developed and tested to estimate potential market capacity, using data from four Russian regions (Tatarstan, Bashkortostan, Chechnya, Dagestan) through 2030. The approach incorporates substitution modeling of lost Western capital, scenario analysis, and the application of blockchain-based financial gateways. Originality/Relevance: The originality of this work lies in linking two underexplored areas—Islamic finance and blockchain technologies—in the context of Russia’s geoeconomic reorientation toward Asia and the Global South. The study provides an innovative framework for replacing Western capital flows with investments from Islamic finance markets through decentralized fintech solutions. Main Conclusion: Findings demonstrate that the use of blockchain-based financial mechanisms can significantly expand the capacity of Russian regions to attract Islamic finance. Tatarstan and Bashkortostan show the highest potential, while Chechnya and Dagestan present smaller but strategically relevant capacities. Blockchain solutions are positioned as a breakthrough tool for overcoming international financial isolation and enabling long-term convergence with Islamic digital ecosystems. Theoretical/Methodological Contribution: The study advances the methodological basis for assessing fintech’s role in regional investment attraction by introducing a quantitative model that integrates substitution coefficients, market capitalization ratios, and penetration indices. It enriches the theoretical discourse on blockchain’s economic externalities and provides policymakers and practitioners with actionable instruments for embedding Islamic finance within regional development strategies.

Mimma Maripatul Uula

This study aims to examine the development of research on the topic of “Islamic Smart Contracts” and potential research plans based on journals published on this theme. This research uses a qualitative method with a bibliometric analysis approach. The data used is secondary data on the theme “Islamic Smart Contract” from the Scopus database, with a total of 74 journal articles. The data was then processed and analyzed using the VosViewer application to map the bibliometric development of “Islamic Smart Contract” research worldwide. The results of the study found 5 clusters with the most frequently used words being smart contract, technology, blockchain, contract, transaction, fintech, blockchain technology, and islamic finance. Then, the research path topics related to Islamic Smart Contracts are Blockchain for Islamic Finance, Fintech in the Islamic Finance Industry, Smart Contracts and Cryptocurrency in Islamic Finance, Smart Contract in Sukuk and Waqf, and Islamic Smart Contracts in Banking.

Mohammad Hadi Andalib, Ahmad Shabani

1. Introduction and ObjectiveInformation asymmetry has long been recognized as a critical challenge within financial markets, where unequal access to information between contracting parties can lead to inefficient outcomes. In the context of Islamic finance, this issue manifests most prominently through adverse selection and moral hazard, both of which are substantially intensified in profit-and-loss sharing arrangements. Participatory contracts such as Mushārakah and Muḍārabah rely on mutual trust, transparency, and aligned incentives. However, empirical evidence from Islamic banking practice—particularly in Iran—shows that actual utilization of these contracts remains limited. Banks frequently avoid participatory financing and shift toward fixed-return modes (such as Murābaḥah), mainly due to the heightened risk of borrower default arising from information asymmetry, insufficient visibility into business operations, and difficulties in monitoring managerial behavior. Within this environment, adverse selection emerges before contract formation when the bank cannot accurately distinguish between high-quality and low-quality project proposals or entrepreneurs. This may result in the unintended approval of risky proposals, thereby elevating the likelihood of non-performing financing. The problem is further accentuated by limitations in credit assessment processes, inadequate transparency in project data, and disparity in profit expectations and execution approaches between banks and entrepreneurs. Recent advances in decentralized technologies—particularly Web3 architectures incorporating blockchain, decentralized identity frameworks, distributed ledgers, and programmable smart contracts—provide new opportunities to address these long-standing informational and contractual challenges. Web3 offers a structural shift from centralized information control to transparent and verifiable records shared within a network of stakeholders. Such transparency can diminish information asymmetry, reduce opportunities for misrepresentation, automate contract enforcement, and improve the reliability of credit histories. The primary objective of this research is to assess the feasibility of reducing default risk caused by adverse selection in Islamic participatory contracts through the application of Web3 technology. The study aims to: (1) Identify the core factors that generate adverse selection in participatory financing, (2) Evaluate the strength and direction of their influence on default risk, and (3) Analyze how Web3 mechanisms can mitigate these factors and enhance the practical viability of participatory contracts in Islamic banking systems.2. Methods and MaterialsThis research adopts a mixed-methods exploratory–confirmatory design. Owing to the complexity and conceptual novelty of integrating Web3 systems with Islamic financial contracts, the study began with a qualitative phase followed by quantitative model testing. Qualitative Phase: Delphi MethodThe qualitative stage employed a three-round Delphi process to identify and validate the principal determinants of adverse selection in participatory financing. The expert panel comprised university scholars in Islamic economics, senior managers of credit and risk departments in Iranian banks, and professional consultants in Islamic financial technology. The first round used open-ended questionnaires to collect diverse expert insights, resulting in an initial list of thirteen candidate factors. In the second round, a structured Likert-scale survey assessed the significance of the proposed factors. Consensus criteria were set at mean ≥ 3.5 and standard deviation ≤ 1, consistent with established Delphi methodology. In the final round, experts confirmed the final factor set, which consolidated into three primary constructs: (1) Lack of transparency in customer information, (2) Insufficient evaluation of the entrepreneur’s technical competence, and (3) Misalignment of objectives between financing partners. These validated constructs provided the basis for the structural model.Quantitative Phase: PLS-SEM AnalysisIn the second phase, a structured questionnaire was administered to 289 participants representing the same expert categories. Data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) via SmartPLS software. PLS-SEM was chosen due to:- The predictive and exploratory nature of the research,- The inclusion of higher-order and formative construct, and- Potential non-normality in expert response distributions. Model evaluation followed established metrics, including reliability (Cronbach’s alpha and composite reliability), convergent validity (AVE), discriminant validity, and structural path significance (t-statistics and p-values). Multi-collinearity was assessed using VIF values, all of which were below the acceptable threshold. Confidence levels were set at 95% with corresponding significance thresholds of p < 0.05.3. Research FindingsThe results of the structural model confirm that adverse selection exerts a direct and significant positive effect on default risk in participatory contracts (β = 0.299, p < 0.01). The components of adverse selection are strongly driven by:- Lack of transparency in customer information (β = 0.932, p < 0.001),- Misalignment of objectives between partners (β = 0.887, p < 0.001), and- Insufficient assessment of entrepreneurial competence (β = 0.885, p < 0.001). This highlights that default risk in participatory financing is not merely a result of financial capacity constraints, but is deeply rooted in information imbalances and strategic behavior at the contract initiation stage. The model further demonstrates that Web3 technologies have a significant mitigating influence. The path coefficient for Web3’s direct effect on reducing default risk is negative and statistically meaningful (β = −0.214, p < 0.01). Additionally, Web3 reduces the negative effects of adverse selection and information asymmetry, as shown by reversed and weakened path effects in the Web3-enhanced environment. Key Web3 mechanisms enabling this outcome include:- Real-time transparency and immutable information records,- Smart contracts that automate profit-sharing and enforce commitments,- Decentralized digital identity (DID) systems that support reliable, tamper-proof credit histories,- Tokenization of collateral and tangible/ intangible assets, enabling verifiable and liquid security guarantees,- Reduced monitoring and enforcement costs due to auditability of on-chain transactions. 4. Discussion and ConclusionThe findings of this research indicate that the primary barrier to effective participatory financing in Islamic banking is not merely structural or regulatory, but fundamentally informational. Adverse selection emerges where transparency, competence assessment, and goal alignment are weak. Conventional mechanisms—such as collateralization and post-contract supervisory audits—provide only partial and reactive mitigation. In contrast, Web3 offers a proactive and systemic solution by embedding transparency, verifiability, and automated compliance directly into the contract infrastructure. By shifting the reliance from personal trust to systemic trust, Web3 supports the original normative philosophy of Islamic finance: equitable profit-and-loss sharing, partnership-based financing, and ethical allocation of capital. From a policy perspective, adopting Web3 frameworks may substantially increase the feasibility and attractiveness of participatory financing modes for Islamic banks that currently avoid them due to high default exposure. This study contributes to the academic discourse on risk management in Islamic finance by demonstrating a structural linkage between information theory, contract design, and emerging decentralized technological capabilities. Practically, the research proposes a hybrid risk-management strategy, integrating traditional credit evaluation frameworks with Web3-based transparency, identity assurance, and automated enforcement. Future work should examine regulatory, Shariah governance, cybersecurity considerations, and interoperability standards needed to implement Web3-based participatory financing systems at scale. Nonetheless, the present results indicate that intelligent and compliant adoption of Web3 can significantly reduce default risk and enable the revival of participatory financing models in Islamic banking.

Milla Febriza, Ahmad Wira, Aidil Novia

Introduction: The rapid development of financial technology (fintech) and blockchain has brought a major transformation in the global industry, including in the Islamic finance sector. However, integrating fintech and blockchain with Sharia principles remains a challenge and has not been studied systematically. This research aims to map and analyze the development of research related to Fintech, Blockchain, and Islamic finance, identifying trends, research gaps, and future development directions. Methods: This study employed a qualitative research method with a Systematic Literature Review approach, utilizing a model prism. The data source for this study consisted of published articles obtained from Scopus and Emerald. The study's results showed that 30 articles, published in Scopus and Emerald, were published between 2015 and 2024. Results: Based on the findings obtained, it is evident that blockchain technology, fintech, and digital innovation have significant potential in enhancing the efficiency, transparency, and inclusivity of Islamic finance, particularly through applications in zakat, waqf, sukuk, and crowdfunding. Despite regulatory and collaboration challenges, these technologies have been able to eradicate poverty, support economic development, and expand access to finance, including in non-Muslim countries. Technology adoption is also influenced by religiosity factors and perception of benefits, confirming the need for global regulatory and standard support to maximize its benefits. Conclusion and Suggestion: The reviewed studies suggest that blockchain technology has significant potential to strengthen trust and compliance with Shariah by enabling smart contracts, decentralized financial products, and transparent auditing mechanisms. Moreover, fintech solutions can expand financial inclusion in Muslim-majority countries and beyond, especially for the unbanked population. However, challenges remain in terms of regulatory frameworks, Shariah standardization, scalability of blockchain applications, and the readiness of financial institutions and customers to adopt these innovations. In conclusion, while fintech and blockchain present strong prospects for advancing Islamic finance, further research and practical implementation are required to fully realize their potential in providing Shariah-compliant, inclusive, and sustainable financial services.

Hiba Raissi, Driss El-Zanati

In recent years, decentralization and regional governance reforms have become a key priority for many countries to promote sustainable territorial development. In Morocco, the 2011 Constitution introduced advanced regionalization, granting regional governments greater autonomy and responsibilities in financing and managing local development. However, more than a decade later, questions remain about the financial performance of these regions and their capacity to mobilize and manage resources effectively. This paper aims to assess the financial performance of Moroccan regions through a case study approach. It examines regional revenue structures, expenditure patterns, fiscal autonomy, and investment capacity to evaluate the alignment between financial capabilities and the objectives of advanced regionalization. Relying on data from official sources, this study aims to provide an analytical overview of regional financial capabilities within the framework of advanced regionalization, contributes to the discussion on regional finance and governance in Morocco and formulates policy-oriented insights to support more effective and sustainable territorial development.

Mohamed alafandi

تتناول الدراسة أبعاد وطبيعة الفجوة المتسعة بين التطور السريع في الابتكار المالي وخاصة صعود التمويل اللامركزي (بذراعيه الأصول والعملات المشفرة ومنصات التداول الرقمية) من جهة، والتطور البطيء في الأطر القانونية والتنظيمية والرؤى الشرعية من جهة أخرى. تركز الدراسة على تحليل بعدين رئيسيين هما: تحليل القضايا المرتبطة بتلك الفجوة والإضاءات الرئيسة لبناء نظام تمويل لا مركزي إسلامي قائم على سلسلة القيم والمبادئ الأخلاقية ومتوافق مع أحكام ومقاصد الشريعة الإسلامية، ومن أبرز القضايا: قضايا الهوية والمشروعية وعلاقة التمويل اللامركزي بنظام التمويل التقليدي، إضافة إلى قضايا الاقتصاد الحقيقي مقابل الاقتصاد المالي. وتبين الدراسة طبيعة القضايا من منظور الاقتصاد الإسلامي، وأبرزها العمل على بناء نظام تمويل (لا مركزي أو مركزي) إسلامي قائم على تمويل أنشطة اقتصادية حقيقية تحقق قيمة مضافة لبناء اقتصاد حقيقي يحقق الاستقرار الاقتصادي والاجتماعي والعدل والإنصاف وحماية الحقوق واستدامة التنمية الشاملة. حيث قدمت الدراسة بعض الإضاءات الرئيسة لسلسلة القيم والمبادئ الأخلاقية التي يقوم عليها نظام التمويل الإسلامي أكان لا مركزيًا أو مركزيًا. وانتهت الدراسة إلى بعض الاستخلاصات والنتائج، ومنها حالة الرؤية الشرعية للأصول والمنصات الرقمية. وبينت الدراسة أن الاتجاه الغالب في هذه الرؤى هو التريث والانتظار في إصدار الحكم الشرعي النهائي، وأنّ هناك تعددًا في الرؤى الشرعية مع تغيّرها أحيانًا، فهي ليست مستقرة بعد ويغلب عليها الحذر. وبالرغم من ذلك تؤكد الدراسة على أهمية الاستفادة من هذا التطور التقني المالي المتسارع في ابتكار منتجات تمويلية متوافقة مع أحكام الشريعة، وهذا هو التحدي القائم من منظور الاقتصاد الاسلامي. الكلمات المفتاحية: الفجوة بين الابتكار والتنظيم الشرعي، التمويل اللامركزي الإسلامي، سلسلة القيم، الأصول الرقمية، العملات الرقمية.

Nopita Sari, Nurul Ain Safrizon, Basarudin Basarudin, Adam Idris

The increasing adoption of blockchain technology in Islamic finance has prompted growing interest in its application for smart contracts within murabahah financing structures. The digital transformation of financial transactions raises important questions regarding Sharia compliance, contractual validity, and legal enforceability in decentralized systems. This study aims to examine how blockchain-based smart contracts can enhance transparency, efficiency, and trust in murabahah financing while maintaining strict adherence to Islamic legal principles. A qualitative-doctrinal research method was employed, integrating analysis of classical fiqh al-mu’?mal?t with contemporary regulatory frameworks governing digital transactions and smart contract implementation. The study utilized comparative analysis of existing blockchain platforms and Islamic financial models to identify areas of alignment and potential conflict. The findings indicate that blockchain technology supports murabahah transactions by automating contract execution, eliminating asymmetrical information, and ensuring compliance with Sharia requirements for ownership transfer and cost disclosure. However, challenges remain in achieving legal recognition of decentralized contracts within conventional judicial systems. The study concludes that blockchain-based smart contracts can be considered Sharia-compliant when developed under proper legal supervision and governance mechanisms, offering a promising pathway for digital transformation in Islamic finance.

Mohammad K. Elshqirat

Since its inception in 2009, cryptocurrencies have been a subject of debate in literature. In the general literature, the debate is mainly about the legality and application of these currencies while in Islamic literature, the debate is about its compliance with Sharia rules and directions. The primary objective of this study was to analyze current cryptocurrencies using a novel methodology and propose a new Islamic cryptocurrency, called “Halal Coin”. To achieve the objectives of this study, a qualitative research method was followed by analyzing how the included cryptocurrencies work, analyzing some of its data for the period from January 1, 2023 to May 31,2025, and determining the characteristics of the proposed coin. Data used in this study were analyzed using descriptive statistics and the measure of “value at risk”. The results revealed that none of the current cryptocurrencies are Sharia-compliant, and the proposed Halal coin is characterized by 15 attributes, including being accessible to all people, serving as a unit of account, and being free from high volatility.

Imran Wajid, Danish Wajid, Bilal Wajid

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.

Wan Amir Azlan Wan Haniff, Redwan Yasin, Rahmawati Mohd Yusoff, Asma Hakimah Ab Halim · 6 authors

The article investigates the challenges and prospects of the ruling of Waqf Crowdfunding (Waqf-CF) scheme adoption in Malaysia as Shariah-compliant fintech successors deployed to mobilize Islamic endowment. However, the implementation of Waqf-CF is hindered by a number of challenges, such as the uncertainty of the legal aspects and fragmented governance, along with technology limitations and Shariah compliance issues. Using a qualitative approach, insights were gathered from seven experts 7 experts in finance, academia, and business to inform and guide our work. The results suggest that poor coordination of regulation between federal and state governments, varied modes of governance, and a lack of fintech literacy in waqf bodies are the barriers to successful implementation. In this regard, the paper examines the Waqf-CF models currently being used, including the Crowdfunding-Waqf Model and the Hasanah Platform, by highlighting the pros and cons of each. Based on these, the authors present a sophisticated hybrid model combining blockchain-based smart contracts, AI-led risk profiling, and real-time Shariah auditing for increased trust, transparency, and scalability. Finally, the paper calls for the need of a national regulatory framework and better institutional support to drive Waqf Crowdfunding as an ethical and sustainable funding option that is in line with Maqasid al-Shariah and the nation’s vision to be a global Islamic financial hub.

Siswoyo Aris Munandar, Fahrurrozi Fahrurrozi

Purpose – This study aims to analyze the controversy surrounding cryptocurrency from the perspectives of Muhammadiyah and Nahdlatul Ulama (NU), focusing on their respective fatwas, the underlying juridical argumentation, and the social and economic implications of these religious rulings in Indonesia.Methodology – Employing a qualitative normative legal approach, the research conducts a comprehensive document analysis of official fatwas issued by Muhammadiyah and NU, complemented by secondary sources such as academic articles, news reports, and government regulations related to cryptocurrency in Indonesia.Findings – Both Muhammadiyah and NU consistently declare crypto-currencies haram (forbidden) primarily because of Islamic legal principles prohibiting gharar (excessive uncertainty), maisir (gambling), and the lack of state sanctions and consumer protection. While sharing this conclusion, the two organizations differ in their juridical methodologies, with NU exhibiting more contextual flexibility through internal debates and regional councils. Implications – The fatwas serves as authoritative guidance shaping Muslim consumer choices and government regulations, reinforcing Islamic ethical standards in financial transactions. However, they also create tension between technological innovation and religious compliance, posing challenges to fintech adoption and inclusive economic growth. The findings suggest the need for ongoing dialogue between scholars, regulators, and industry stakeholders to reconcile Sharia compliance with digital financial innovation.Originality – This study provides an original contribution by offering a comparative, in-depth analysis of the legal reasoning within the Muhammadiyah and NU fatwas on cryptocurrency, linking doctrinal argumentation to broader socioeconomic outcomes. It fills a gap in the existing literature that mostly catalogs fatwa content without examining their interpretive nuances and practical impacts in Indonesia’s unique socio-religious context.

Alfina Rahmatia, Arief Dwi Saputra

Purpose – Non-Fungible Tokens (NFT), one of the latest innovations in the financial world, have succeeded in triggering debate among the public, especially in terms of Islamic financial principles. Therefore, this study seeks to explore the gap between public societies’ perspectives on NFT on Twitter and the discourse conveyed by experts in research articles or journalists in popular articles. Methodology: This study combines two analyses, namely sentiment analysis, using the R Studio application to categorize public opinion into positive, neutral, and negative sentiments. Discourse analysis uses the NVivo 12 application to identify critical themes in scientific writing.Findings – The results show various perceptions of positive sentiments often associated with NFT and innovation. By contrast, negative sentiments focus on speculation, lack of clarity, and the potential to conflict with the principles of Islamic finance. These findings convey concerns about the speculative nature of the NFT and its compliance with Sharia law. However, some scholars argue that NFT can be structured according to Islamic ethics if proper guidelines are followed. Implications – This study contributes to bridging the gap between public perception and scholars, so that insights arise regarding NFT as perceived within the framework of Islamic finance. Originality – We believe this study is the first qualitative study to investigate public sentiment about NFT from Twitter/X and discuss it with the principles of Islamic finance.

Adimas Agus Ahmad Asy’arie, Arlinta Prasetian Dewi, Binti Nur Asiyah

This paper proposes a conceptual blockchain-based Sharia accounting model designed to enhance transparency and trust within Islamic Financial Institutions (IFIs). The research addresses the growing yet challenged Islamic finance industry by leveraging blockchain's inherent features, including immutability, decentralization, and smart contracts. The model aims to improve accountability, reduce fraud, and strengthen Sharia compliance by providing real-time, verifiable financial records. This approach offers a novel contribution by systematically integrating advanced technology with Islamic ethical principles, leading to more robust and reliable financial reporting for all stakeholders.

Syamsul Bachri Soamole

Purpose:The rapid growth of cryptocurrencies has revealed a significant disconnect between speculative digital assets and the ethical principles of Islamic finance.Bitcoin's volatility, three to four times higher than traditional equity indices, along with its energy-intensive mining process, directly contradict Shariah principles emphasizing stability, asset-backing, and minimization of gharar (excessive uncertainty).This study addresses the gap between blockchain technology's potential and the requirements of Islamic financial systems by proposing and empirically testing a Shariah-compliant digital finance model.Design/Methodology/Approach: A mixed-method approach was employed, integrating a PRISMA-guided systematic literature review, panel data analysis of 100 fintech firms from 2018 to 2024, and Monte Carlo simulation.Fixed-effects regression was used to assess the impact of blockchain adoption on financial performance (ROA, ROE) in both Islamic and conventional fintech firms.The simulation evaluated the efficiency of a Hybrid Shariah Blockchain Model for tokenized waqf (Islamic endowment) operations.Findings: Results indicate that blockchain adoption significantly improves financial performance in Islamic fintech (ROA: = 0.023, t = 3.41; ROE: = 0.067, t = 2.79).Simulation results demonstrate a reduction in transaction latency from 3.2 days to 12.4 seconds (95% CI: 10.1-14.7),complete auditability, and transaction costs below $1.00 per operation.Practical Implications: Policy recommendations include regulatory sandboxing and institutional integration strategies to mainstream Shariah-compliant blockchain applications.Originality/Value: This study presents the first simulation-based validation of waqf blockchain governance grounded in Islamic jurisprudence, offering a scalable framework for ethical, decentralized financial services benefiting 1.8 billion Muslims worldwide.

A. Intan Cahyani, Baidhowi

The integration of blockchain-based smart contracts technology has emerged as an innovative solution in banking. The utilization of blockchain technology and smart contracts offers great potential in improving operational efficiency and compliance with Shariah principles in Islamic banking products. Overall, blockchain-based smart contracts have the potential to overhaul the traditional way of providing Islamic banking services, by providing more efficient, transparent, and inclusive solutions. This research emphasizes the need for technological readiness and supportive policies for the successful implementation of this technology in the Islamic banking sector. This article discusses the potential use of smart contracts in strengthening automation and sharia compliance in Islamic banking products, focusing on the role smart contracts can play in increasing Islamic financial inclusion and expanding access to Islamic banking services and how prepared Islamic financial institutions are to adopt blockchain technology and smart contracts. That way, the utilization of blockchain-based smart contracts integration can be seen as better to bring significant changes in the Islamic banking sector, both in terms of increasing efficiency and in strengthening sharia principles which are the main foundation of the Islamic financial system.

Umi Khusnul Khotimah

Introduction: The rapid development of digital technology has introduced new challenges in the practice of inheritance distribution, particularly concerning digital assets such as cryptocurrency and NFTs.Purposes of the Research: This study aims to explore gender justice in the distribution of digital inheritance, focusing on the Islamic fiqh perspective toward cryptocurrency and NFTs assets in Dubai.Methods of the Research: Using a qualitative approach, the research analyzes fiqh texts, existing regulations, and real-life cases related to digital inheritance. Data were collected through document analysis, case studies, and expert interviews involving Islamic scholars and digital asset practitioners in Dubai.Results of the Research: The findings reveal that digital inheritance, characterized by unique properties such as anonymity and the need for secure access, presents significant challenges in ensuring fair distribution, especially for women. The study highlights cultural and technological barriers that limit women’s access to digital inheritance, despite their growing economic contributions. The novelty of this research lies in proposing a contemporary fiqh framework that integrates traditional Islamic principles with modern technological solutions such as blockchain, aiming to ensure transparency and fairness in inheritance distribution. By addressing the gender gap in digital inheritance, this research contributes to the development of equitable and practical fiqh guidelines for Muslim communities in the digital era.

Kaharuddin Kaharuddin, Asep Saepudin Jahar, Arta Amaliah Nur Afifah

Blockchain technology introduces an innovative approach to waqf governance by incorporating smart contracts based on distributed ledger technology and encryption security. This advancement enhances administrative services and strengthens public trust in waqf management. This research uses a qualitative descriptive approach based on a literature review to explore the benefits of applying blockchain technology in waqf governance. The findings reveal that blockchain technology significantly improves the previously unstructured waqf governance system. By enabling encrypted and decentralised transaction recording, blockchain ensures transparent management of waqf funds, facilitates efficient tracking of fund status, and prevents data manipulation. Additionally, blockchain enhances the efficiency and security of transactions, paving the way for an innovative and digital waqf ecosystem. The technology also promotes financial inclusion by expanding public access to participate in waqf initiatives. This broader participation contributes to poverty alleviation (SDG 1) and reduces economic disparities (SDG 10) through waqf funds’ transparent and accountable distribution. Integrating blockchain technology into waqf governance offers a transformative solution for advancing transparency, efficiency, and inclusivity in Sharia financial systems.

Zahiduzzaman Zahid, Ruhul Amin, Ibrahim Khalil, Basharat Ali Khan Mohammed · 5 authors

This paper investigates the intersection of MiCA and Islamic finance by conducting a comparative regulatory analysis, focusing on core areas such as stablecoin structures, decentralized finance (DeFi), smart contracts, and ethical governance. It critically examines MiCA’s reserve and redemption frameworks for asset-referenced tokens (ARTs) and e-money tokens (EMTs) against Shariah mandates of asset-backing, risk-sharing, and prohibition of riba (interest) and gharar (excessive uncertainty). The analysis further explores the legal and ethical tensions between MiCA’s treatment of decentralized assets and Islamic jurisprudence, especially regarding profit-sharing models like Mudarabah and Musharakah. It highlights challenges Islamic fintechs operating within the EU face, including the lack of recognition for Shariah boards and faith-based audit systems under MiCA. The study concludes by proposing policy recommendations for greater inclusivity, including potential amendments to MiCA that accommodate ethical finance models and support Islamic digital financial innovation. The findings contribute to the global discourse on harmonizing digital asset regulation with diverse ethical and religious frameworks, offering valuable insights for regulators, scholars, and Islamic financial institutions

Mohammd Ali G Al Zuraib

Cryptocurrencies, particularly Bitcoin and Ethereum, have reshaped global conceptions of money, ownership, and exchange. With the rise of blockchain technology—distributed, immutable digital ledgers—applications have expanded into areas such as smart contracts, asset tokenization, and non-fungible tokens (NFTs). These shifts present pressing challenges to traditional Islamic legal structures, which have historically grounded financial rulings in well-defined principles such as prohibition of riba (intere... In this context, Islamic jurisprudence must critically engage with these technologies—not by rejection or blind acceptance—but through a measured analysis rooted in legal maxims and maqāṣid al-sharīʿah (the higher objectives of Islamic law). This study explores the Islamic legal perspective on cryptocurrencies and blockchain technologies, providing an analytical review of scholarly opinions, regulatory frameworks, and economic realities across Muslim and global contexts.

Muhammad Kamil Husain, Delly Maulana, Syihabudin Syihabudin, Amalia Muazzah Adawiah · 5 authors

This study examines how local government policy contributes to the effectiveness of zakat revenue collection, focusing on the case of BAZNAS in Serang Regency, Indonesia. Zakat, an Islamic fiscal obligation, serves not only as an act of worship but also as a mechanism for socio-economic redistribution. Despite its potential, zakat collection in many regions remains suboptimal due to fragmented policies and weak institutional synergy. This research addresses a critical gap in global Islamic finance literature by investigating zakat governance at the subnational level, especially in a decentralized administrative context. Using a qualitative method that includes document analysis and semi-structured interviews with key stakeholders, the study explores how formal regulations, government facilitation, and inter-agency coordination shape institutional performance. The findings reveal that local policies—such as mandatory zakat deductions for civil servants, operational support, and integration of zakat into regional development planning—significantly enhance zakat income and institutional legitimacy. However, challenges such as limited bureaucratic capacity, inconsistent implementation, and fragmented institutional roles hinder optimal performance. The study concludes that effective zakat governance requires not only normative alignment with Islamic values but also robust policy design, administrative professionalism, and participatory mechanisms. By bridging institutional theory and Islamic public finance, this study offers a contextualized model of state–faith institutional synergy that may be applied to other Muslim-majority countries or regions with similar governance dynamics.

Fatima Zohra Benali, Wildan Miftahussurur Miftahussurur, Rijal Ali Santos Santos, Zaenol Hasan

This study examines the application of qiyas (analogical reasoning) in assessing the legality of cryptocurrency within Islamic law, particularly through the fatwas issued by the National Sharia Council of the Indonesian Ulema Council (DSN-MUI). As cryptocurrency emerges as a significant innovation in the economic sector, the research analyzes classical fiqh texts and draws analogies with paper money to identify essential criteria for cryptocurrency to be considered a legitimate medium of exchange, including being valuable, pure, transferable, and beneficial. The findings indicate that while cryptocurrency lacks official backing, its value is derived from societal trust in blockchain technology. The study emphasizes the necessity for cryptocurrency transactions to comply with Sharia principles, avoiding elements of riba, gharar, and maysir. Additionally, it highlights the importance of collaboration among scholars, academics, and practitioners in Sharia economics to develop responsive fatwas and policies that address technological advancements and societal needs. Furthermore, to provide a broader perspective, examples from other countries, such as Malaysia, Algeria, and Morocco, can be referenced to understand how different Islamic authorities approach the regulation and assessment of cryptocurrency. For instance, Malaysia's Shariah Advisory Council has recognized cryptocurrencies under certain conditions, while Algeria has outright banned their use due to concerns over their volatility and speculative nature. Morocco, on the other hand, has issued warnings about the risks associated with cryptocurrency, despite the growing global interest in digital currencies. By examining these diverse approaches, the research can offer a more comprehensive understanding of how cryptocurrency fits within the frameworks of Islamic finance and law across different contexts. This research contributes to the discourse on integrating modern financial systems with Islamic principles, suggesting that cryptocurrencies can be utilized within Islamic economies if they adhere to Sharia guidelines. Ultimately, the study aims to provide practical guidance for Muslims in conducting economic activities in the digital era while leveraging technological progress to enhance welfare and prosperity.