This study examines the potential risks of emerging payment technologies and value transfer systems in facilitating terrorist activities. Through an analysis of publications, blogs, and websites associated with terrorist groups and their supporters, the research reveals a growing interest in leveraging cryptocurrencies like Bitcoin and online crowdfunding platform to support funding, planning, and implementation of terror attacks. While concrete evidence of large-scale cryptocurrency use by terrorist groups is limited, there are indications of links to several terror attacks globally. This study demonstrates the potential for cryptocurrencies to facilitate clandestine activities, utilizing a document published by ISIS that outlines instructions undetected. By analyzing this document, researchers highlighted the potential risks associated with the anonymous and decentralized nature of cryptocurrency transactions. The study adopted actor-network theory as its theoretical underpinning. The findings suggest that terrorist organizations are actively exploring new technologies to mitigate risks associated with traditional fund transfer methods, with some websites collecting donations in Bitcoin. The study recommends amongst others that the Law enforcement agencies must enhance their capabilities to track cryptocurrency transactions, which include training investigators in illicit finance investigations involving cryptocurrencies, recruiting experts in the field, and acquiring advanced IT systems despite the challenges.
Ryandika Abbel Syarief, Reka Dewantara, Ranitya Ganindha
In this study, the author addresses the issue of the absence of regulations concerning the Decentralized Finance (DeFi) system as a development within the cryptocurrency asset ecosystem. The Decentralized Finance system is capable of establishing a decentralized financial ecosystem using cryptocurrency assets. The regulatory framework in Indonesia has yet to provide adequate legal protection for cryptocurrency asset customers engaging in transactions within the Decentralized Finance system. This research employs a normative juridical method, utilizing a statute approach, a conceptual approach, and a comparative approach. The primary, secondary, and tertiary legal materials obtained by the author are analyzed using grammatical and systematic interpretation methods. The author concludes that the urgency of regulating the supervision of the Decentralized Finance system lies in its potential to provide legal protection for cryptocurrency asset customers by minimizing the risk of losses, particularly given society's difficulty in adapting to the rapid advancements in financial technology. The regulatory conceptualization proposed by the author, based on comparisons with regulations related to cryptocurrency and Decentralized Finance in Singapore, Australia, the European Union, and the FATF, suggests tightening the assessment and compliance processes for service providers and/or parties conducting business activities with service providers. This includes requiring specific certifications or licenses for the operation of Decentralized Finance systems, identifying the status and role of each party or entity involved, establishing governance protocols and emergency schemes, mandating reporting obligations and transparency for services and the cryptocurrency assets used within the system, and ensuring compliance oversight concerning the scale and scope of service products.
Istianah Zainal Asyiqin, M. Fabian Akbar, Manuel Beltrán Genovés
The rapid advancement of the digital age has driven significant developments in payment systems, influencing financial decisions and fostering economic activity. This study explores the use of cryptocurrencies as digital currencies in financial transactions, particularly in the context of investments, while assessing their compatibility with Islamic law. Employing a normative legal approach and a descriptive-analytical method, the research examines legal principles and facts concerning cryptocurrency regulation in Indonesia. The findings reveal that, despite the potential benefits of cryptocurrencies, their usage remains contentious from both regulatory and Islamic law perspectives. In Islamic law, cryptocurrency transactions are classified as haram lighairihi due to elements of uncertainty (gharar) and speculative risks, making them non-compliant with Sharia principles. As a solution, this study proposes a framework for integrating cryptocurrency exchanges with Rupiah transactions in accordance with Sharia economic principles. This integration aims to mitigate risks while maintaining the flexibility of digital transactions, ensuring they align with both regulatory standards and Islamic legal frameworks.
Syafiqah Ilyani Ahmad Saharudin, Norhidayah Abu Bakar
This paper presents a comparative analysis of the regulatory frameworks, product development, and market penetration of Islamic finance in Malaysia and Saudi Arabia: two leading players in the global Islamic finance industry. Malaysia adopts a dual system that combines centralized and institutional Shariah oversight, while Saudi Arabia employs a decentralized regulatory approach. In terms of product development, both countries prioritize Shariah compliance and innovation, though Malaysia offers a broader range of Islamic financial products. Market penetration is evaluated using key indicators such as Islamic banking assets, Takaful assets, and Sukuk issuance. The findings reveal that each country excels in different areas: Saudi Arabia leads in the total asset value of Islamic finance, whereas Malaysia shows a higher proportional adoption of Islamic financial products. Overall, the study provides a comprehensive understanding of the factors driving the success and distinct characteristics of Islamic finance in these two nations, offering valuable insights into their evolving financial landscapes and highlighting their respective strengths.
Ahmad Dahlan Salleh, Muhammad Amir Husairi Che Rani
Bitcoin is one of the most popular digital currencies in its community. It commenced with various innovations with a focus on transforming the world's monetary system, meanwhile bitcoin is faced with legitimate constraints, absence of regulation and becoming a tool to illegal activities. Generally, this paper aims to discuss the operating mechanism of bitcoin, as well as the ma?la?ah (public interest) and mafsadah (harm) that exist in the bitcoin financial system to measure its effectiveness in realizing the concept of ?if? al-M?l (preservation of wealth). Additionally, this paper lists several views of Islamic scholars and fatwas (legal pronouncements) related to the status of bitcoin according to Sharia and analyzes the relevance of using bitcoin as an instrument of payment according to the perspective of siy?sah sharciyyah (Islamic politics). The outcome of this discussion will explain the position of bitcoin as a new currency according to the Sharia perspective in realizing ?if? al-M?l (preservation of wealth)
The concepts, governance frameworks, and contributions of Islamic finance to sustainable development are the main topics of this paper. Shariah law adherence is stressed, and concepts like profit-and-loss sharing, risk-sharing, and the ban on interest (riba) and speculative activity (gharar) are covered. The ethical and asset-backed characteristics of important products, such as Takaful (Islamic insurance) and Sukuk (Islamic bonds), are examined. The article describes how Islamic finance aligns with the Sustainable Development Goals (SDGs), highlighting how it affects social responsibility, environmental efforts, and financial inclusivity. With comparisons between centralized and decentralized alternatives in different areas, governance frameworks and obstacles in Shariah-compliant enterprises are discussed. Standardization, openness, and the function of Shariah boards are among the topics discussed. Islamic finance is promoted as a morally sound and long-lasting substitute for traditional financial systems by encouraging equality, collaboration, and social justice.
This paper explores the evolution of decentralized finance (DeFi), represented as Rama, and its adversary, centralized finance (CeFi), represented as Ravana in the metaphorical context of the Ramayana. Drawing inspiration from the story of the Raja's attempt to fill a temple with milk for Lord Shiva, we examine how individual greed, lack of transparency, and improper contributions can lead to the collapse of collective financial systems. Just as Ravana's greed and manipulation disrupt harmony, CeFi is characterized by centralized control, fostering inefficiency and inequity. In contrast, DeFi offers a decentralized, transparent system that aims to align with Shiva's Linga, the symbol of purity and divine order, ensuring collective participation for an optimized financial ecosystem.
Mohammad Zulfakhairi Mokthar, Noraina Mazuin Sapuan, Sharul Shahida Shakrein Safian
Blockchain technology offers transformative benefits for waqf by enhancing transparency, security, and efficiency. Its decentralized ledger system allows for independent transaction verification, reduces central authority risks, and improves accountability. However, while the potential benefits are significant, the success of blockchain-based waqf initiatives hinges on the level of trust that stakeholders place in this technology. Therefore, the study aims to examine the effect of trust in blockchain technology on the intention to adopt waqf blockchain with insight from importance-performance map analysis to better understand the relations between trust and intention. The study adopted a survey research design and data was collected through questionnaires distributed throughout Malaysia. The collected data were then analyzed using Smart-PLS software. The results of the analysis indicate a strong positive relationship between trust in blockchain technology and the intention to adopt waqf blockchain. However, the importance-performance map analysis shows a critical disparity exists between user expectations and actual performance, especially regarding the transaction process, which scored the lowest in performance. This implies a need to focus on improving the transaction process to align with user expectations.
Muhammad Fakhri Amir, Syahruddin Kadir, Sumarlin Sumarlin
Technological innovations are revolutionizing the financial sector through decentralized systems. The emergence of digital currencies necessitates a shift in the financial system toward services that accommodate the development of digital money in the era of Society 5.0. This study aims to explore the potential of Decentralized Finance (DeFi) and its maslahah (benefit) for future financial services in Indonesia. A qualitative approach was employed using library research by collecting primary and secondary data from journals, books, and other literature. Data were analyzed using descriptive analysis through data grouping, data display, and conclusion drawing. The findings indicate that DeFi has the potential to become one of the future financial services as it aligns with technological advancements and the development dimensions of the Society 5.0 era. DeFi offers five maslahah benefits: (1) Protecting religion (hifzu al-din) by serving as an alternative investment instrument; (2) Protecting life (hifzu an-nafs) by becoming a financial market instrument; (3) Protecting progeny (hifzu al-nasl) by encouraging income growth; (4) Protecting intellect (hifzu al-‘aql) by developing human resource potential; and (5) Protecting wealth (hifzu al-maal) by accommodating sources of income and financing for the benefit of society. Therefore, DeFi holds significant potential to contribute positively to Indonesia's financial future by providing services aligned with the values of maslahah and the technological advancements of Society 5.0.========================================================================================================ABSTRAK - Desentralisasi Keuangan dan Maslahahnya: Membentuk Layanan Keuangan Masa Depan di Indonesia. Inovasi teknologi mengarah pada revolusi sektor keuangan melalui sistem terdesentralisasi. Kemunculan mata uang digital memaksa sistem keuangan untuk beralih ke layanan yang mengakomodasi perkembangan uang digital di era 5.0. Penelitian ini bertujuan untuk menggali potensi Decentralized Finance (DeFi) berikut maslahahnya sebagai layanan keuangan masa depan di Indonesia. Penelitian ini menggunakan pendekatan kualitatif dengan metode kepustakaan, dimana data-data dikumpulkan dari artikel jurnal, buku, dan literatur lainnya. Analisis data dilakukan dengan metode deskriptif melalui pengelompokan data, penyajian, dan penarikan kesimpulan. Hasil penelitian menunjukkan bahwa DeFi memiliki potensi untuk menjadi salah satu layanan keuangan di masa depan karena selaras dengan kemajuan teknologi dan dimensi pengembangan untuk era 5.0. DeFi menawarkan lima manfaat maslahah: (1) Melindungi agama (hifzu al-din) dengan menjadi instrumen investasi alternatif; (2) Melindungi jiwa (hifzu an-nafs) dengan menjadi instrumen pasar keuangan; (3) Melindungi keturunan (hifzu al-nasl) dengan mendorong pertumbuhan pendapatan; (4) Melindungi akal (hifzu al-‘aql) dengan mengembangkan potensi sumber daya manusia; dan (5) Melindungi harta (hifzu al-maal) dengan mengakomodasi sumber pendapatan dan pembiayaan untuk kepentingan masyarakat. DeFi memiliki potensi yang signifikan untuk berkontribusi secara positif terhadap masa depan sistem keuangan Indonesia dengan menyediakan layanan yang sejalan dengan nilai-nilai maslahah dan kemajuan teknologi era 5.0.
Purpose: This research concludes that, with a strategic and collaborative approach, blockchain technology can be an effective tool for transforming the Islamic banking industry. Methodology: This study uses qualitative methods with literature analysis from 19 journals, one book, and three websites to explore how this technology can be applied in risk management, asset tracking, and interbank transactions. Results: The research results reveal that this technology can reduce fraud, manipulation, and cyberattacks, as well as increase customer and sharia authority trust through transaction transparency. However, there are major challenges to overcome, such as immature regulatory aspects, the need for a strong infrastructure, and a lack of understanding of this technology among customers. This study also emphasizes the importance of collaboration between Islamic banking, regulators, and other stakeholders to maximize the potential of blockchain technology. Limitations: Case studies on the use of smart contracts in the Sharia banking industry show that this technology can increase efficiency and Sharia compliance, reduce administration costs, and simplify transactions. Contribution: This study describes the role of blockchain in the sukuk issuance process. Blockchain technology, which is known for its decentralization, transparency, and security characteristics, has great potential to increase efficiency and transparency in Sharia banking operations.
The rise of cryptocurrency has sparked a global financial revolution, captivating the interest of various demographics, including the digitally savvy Generation Z. This study explores the Islamic perspective on cryptocurrency investment, focusing particularly on the intersection of Generations Z Fear of Missing Out (FoMO) and their personal traits of traders. Within Islamic finance, which emphasizes ethical investing and prohibits speculative activities akin to gambling, cryptocurrency presents a unique challenge. The rapid appreciation of digital currencies and the pervasive influence of social media amplify FoMO among young investors, driving them to partake in high-risk ventures. This behavioral inclination often conflicts with Islamic principles, which advocate for risk-sharing and tangible asset-backed transactions. The study delves into how Generations Z psychological predispositions, such as overconfidence, risk tolerance, and the allure of quick gains, align or clash with Islamic ethical standards. It examines the potential for educational interventions to reconcile these differences by promoting financial literacy that aligns with Sharia law. Additionally, the study addresses the broader implications of these trends on the development of Islamic financial products tailored to digital assets, aiming to bridge the gap between religious adherence and modern investment opportunities. This research highlights the necessity for a nuanced understanding of Generations Z investment motivations and the importance of integrating Islamic ethical considerations into the evolving landscape of cryptocurrency. The method used in this study is a mixed method, namely a combination of quantitative and qualitative methods. The quantitative method is used to analyze multi-time series forecasting on Generations Z fear of missing out (FoMO) and their personal traits as traders. While the qualitative method is used to analyze the results of an in-depth interview and find the potential conflicts with Islamic principles advocating for minimum transaction risk and for the use tangible asset-backed transactions. The results suggest that generation Z becomes more immersed in digital and social media landscapes, their susceptibility to FoMO intensifies, driving more frequent and sometimes impulsive trading behaviours. Concurrently, as these young investors gain more experience and exposure to the cryptocurrency market, their personal traits such as risk tolerance, adaptability, and tech-savviness also evolve, potentially leading to more sophisticated trading strategies. However, these practices conflict with Islamic point of view.
This study explores the adoptability of cryptocurrency within the Islamicfinancial system, a topic of substantial debate among scholars and practitioners. Given thedecentralized nature of cryptocurrency, its acceptance within the conventional and Islamicfinancial systems presents unique challenges. To ascertain the legitimacy and possibleadoptability of cryptocurrency under Sharīʿah law, this paper employs qualitative researchmethods, using in-depth interviews of twenty-four Sharīʿah scholars. These scholars,selected through purposive and snowball sampling techniques, possess expert knowledgeof both cryptocurrency and the Islamic financial system. The results revealed that theacceptability of cryptocurrency in Sharīʿah-compliant financial systems is contingent onits centralization and its function as a store of value, aligning with the objectives (maqasid)of Sharīʿah. Cryptocurrency's lack of intrinsic value necessitates its backing by a centralauthority or asset to mitigate risks and potential fraud. This research offers valuableinsights into the considerations required for cryptocurrencies' adoption in Islamic finance,contributing to the ongoing debate on their legitimacy under Sharīʿah law.
<p>This study investigates the financial psychology of Moroccan investors in cryptocurrency, focusing on the determinants of perceived investment risk. <strong>Design/methodology/approach</strong>: A quantitative survey was conducted among Moroccan investors, and regression analysis was applied to identify the factors influencing their risk perceptions, including transaction fees, complexity, security, anonymity, fast transactions, volatility, and lack of regulation. <strong>Findings</strong>: The analysis reveals that volatility and lack of regulation significantly heighten perceived risk, whereas fast transactions, reduced complexity, and improved security mitigate it. These results suggest targeted strategies to address volatility and regulatory concerns can decrease perceived risks and attract more investors. <strong>Originality</strong>: This research provides new insights into the interplay of technological, regulatory, and psychological factors influencing investment behavior in a developing country context, specifically Morocco, thereby contributing to the broader literature on financial inclusion and technology adoption. <strong>Research limitations/implications</strong>: The study's limitations include its reliance on self-reported data and the specific focus on Moroccan investors, which may limit the generalizability of the findings. <strong>Practical implications</strong>: By addressing identified risk factors, policymakers and cryptocurrency platforms can develop targeted interventions to reduce perceived risks, thus encouraging broader investment and enhancing financial inclusion. <strong>Social implications</strong>: Improving cryptocurrency literacy and addressing regulatory challenges can promote more inclusive financial participation, fostering economic growth and reducing financial disparities in Morocco.</p><p><strong>JEL:</strong> D81, D91, E44, G11, G23, G41, O16</p><p>Cette étude examine la psychologie financière des investisseurs marocains en cryptomonnaies, en se concentrant sur les déterminants clés de la perception du risque d'investissement. <strong>Conception/méthodologie/approche</strong> : Une enquête quantitative a été menée auprès d'investisseurs marocains, et une analyse de régression a été utilisée pour identifier les facteurs influençant leurs perceptions du risque, notamment les frais de transaction, la complexité, la sécurité, l'anonymat, la rapidité des transactions, la volatilité et les lacunes réglementaires. <strong>Résultats</strong> : La volatilité et l'absence de réglementation augmentent significativement le risque perçu, tandis que la rapidité des transactions, la réduction de la complexité et l'amélioration de la sécurité le réduisent. Ces résultats suggèrent que le traitement des questions de volatilité et des préoccupations réglementaires pourrait atténuer les risques et encourager un investissement plus large. <strong>Originalité/valeur</strong> : Cette recherche apporte de nouvelles perspectives sur l'interaction des facteurs technologiques, réglementaires et psychologiques qui influencent le comportement d'investissement au Maroc, contribuant ainsi à la littérature plus large sur l'inclusion financière et l'adoption des technologies. <strong>Limites de la recherche</strong> : La dépendance aux données auto-déclarées et le focus sur les investisseurs marocains peuvent limiter la généralisation des résultats. <strong>Implications pratiques</strong> : Les décideurs politiques et les plateformes de cryptomonnaies peuvent utiliser ces informations pour développer des interventions ciblées visant à réduire les risques perçus et à promouvoir l'inclusion financière. <strong>Implications sociales</strong> : Améliorer la littératie en cryptomonnaies et relever les défis réglementaires pourrait favoriser une inclusion financière et une croissance économique plus large au Maroc.</p><p> </p><p><strong> Article visualizations:</strong></p><p><img src="/-counters-/soc/0715/a.php" alt="Hit counter" /></p>
Purpose:The purpose of this study is to investigate the adoption of financial technology on the green growth and sustainability of SMEs.The root issue is that despite the increasing attention of fintech exposure in business markets, Malaysian businesses are hesitant to fully adopt this emerging technology.This study aims to bridge the gap between the potential of fintech innovations and their practical implementation by adopting two theoretical approaches: 1) Research-based view model for green growth 2) Extended version of the technology acceptance model for the fintech dimension.Design/Methodology/Approach: The research adopts a quantitative method using a crosssectional survey design with a five-point Likert scale questionnaire.Data was collected from 247 decision-makers representing SMEs in Selangor, Malaysia, and the sampling technique uses stratified random sampling.The data were analyzed using SPSS and Smart-PLS.Findings: Fintech factors of green financing and green investment significantly influence the green growth sustainability, while cryptocurrency is not significant towards it.Interestingly, the finding on the moderator role of blockchain smart contracts does not play a role in moderating all the fintech factors toward green growth sustainability.Practical Implication: The direct relationship of green financing and green investment is driving the future innovation toward green growth sustainability, particularly for SMEs, but cryptocurrency gives a different insight on it.On the other hand, integrating blockchain smart contracts as the moderator for the fintech dimension does not allow the businesses to move toward green sustainability.It is essential for companies to provide platforms by offering knowledge and awareness about this technology.Aside from this, the study provides empirical implications for SMEs green growth sustainability using fintech platforms.Originality value: The research findings reveal that the moderating effect of blockchain smart contracts was insignificant in driving green sustainability outcomes for SMEs.This innovation did not support green growth sustainability to enhance transparency and increase the accountability into the environmental claims.It challenges the technology-centric view
This research paper aims to explore aspects of smart contract technology in Islamic finance, focusing on its legitimacy, objectives, and potential applications in Islamic social finance. This study relies on comparative qualitative analysis methodology and revolves around discussing the nature of smart contracts, the challenges related to their formulation and implementation, regulatory frameworks, and the cryptocurrencies used within them. The study presents proposed models for utilizing smart contracts in Islamic social finance and uses comparisons between different experiences to provide in-depth insights.This article also presents proposed models for leveraging smart contracts in Islamic social finance, using a comparative qualitative analysis approach. The study underscores the significance of integrating new innovations to maintain leadership in finance, as Islamic finance seeks to integrate its principles with Sharia-compliant systems and develop products that combine technological excellence with Sharia compliance. This study provides important findings and valuable recommendations for integrating smart contracts into Islamic social finance, contributing to enhancing innovations and developing advanced financial tools that effectively meet market needs while complying with Sharia principles. ملخص البحث هذه الورقة البحثية تهدف إلى استكشاف جوانب تقنية العقود الذكية في المالية الإسلامية، مركزة على شرعيتها، وأهدافها، واستخداماتها المحتملة في التمويل الاجتماعي الإسلامي. يتمحور منهج الدراسة حول مناقشة طبيعة العقود الذكية، والمشكلات المتعلقة بصياغتها وتنفيذها، والأطر التنظيمية لها، والعملات المشفرة المستخدمة ضمنها. كما يقدم الورق نماذج مقترحة للاستفادة من العقود الذكية في التمويل الاجتماعي الإسلامي، باستخدام منهج تحليلي نوعي مقارن. وتبرز أهمية الدراسة في الحاجة الملحة إلى اعتماد الابتكارات الجديدة للحفاظ على الريادة في المالية، حيث تسعى المالية الإسلامية لدمج مبادئها مع الأنظمة المتوافقة مع الشريعة وتطوير منتجات تجمع بين التميز التكنولوجي والامتثال الشرعي. الدراسة تأتي بنتائج مهمة وتوصيات قيمة لدمج العقود الذكية في التمويل الاجتماعي الإسلامي، مما يسهم في تعزيز الابتكارات وتطوير أدوات مالية متقدمة تلبي احتياجات السوق بشكل أكثر فعالية وامتثالًا للشريعة.
The integration of blockchain technology and cryptocurrency within the framework of Islamic finance has raised significant ethical, legal, and regulatory concerns. Blockchain technology, known for its transparency, decentralization, and immutability, offers a promising solution for enhancing financial inclusion, transparency, and security in financial transactions. However, the use of cryptocurrencies, such as Bitcoin and Ethereum, introduces complexities due to their speculative nature, which may violate Sharia principles like gharar (excessive uncertainty) and riba (usury). This study explores the compatibility of blockchain and cryptocurrency with Sharia law, focusing on the challenges and opportunities that arise in the context of Islamic finance. The study analyzes existing fatwas (Islamic legal opinions), regulatory frameworks, and the application of Sharia principles to emerging financial technologies. It discusses the ethical dimensions of blockchain and cryptocurrency, such as their potential to promote fairness and transparency, while addressing concerns about privacy violations and the risks associated with unregulated trading. Furthermore, the research highlights the lack of standardized global regulations for cryptocurrency and blockchain, which complicates their adoption in Muslim-majority countries. The study also emphasizes the importance of establishing Sharia-compliant governance frameworks and regulatory standards to ensure the ethical use of these technologies. Finally, the study provides recommendations for further research in the intersection of Islamic law, digital finance, and global governance frameworks, focusing on the development of policies that ensure Sharia-compliant digital assets and technologies.
Purpose: Aim of the study was to analyze the impact of cryptocurrency adoption on financial inclusion in Myanmar. Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: Cryptocurrency adoption in Myanmar holds promise for enhancing financial inclusion by offering faster and cheaper remittance options, especially in underserved rural areas. However, challenges such as regulatory uncertainties and concerns over consumer protection must be addressed through clear and supportive regulatory frameworks. To maximize benefits, Myanmar should focus on improving financial literacy, developing user-friendly cryptocurrency platforms integrated with mobile money services, and establishing coherent regulatory guidelines in collaboration with international bodies. Unique Contribution to Theory, Practice and Policy: Diffusion of innovation theory, technology acceptance model (TAM) & institutional theory may be used to anchor future studies on impact of cryptocurrency adoption on financial inclusion in Myanmar. Practical initiatives should prioritize enhancing financial literacy and digital education programs tailored to Myanmar's population. Initiatives that promote understanding of blockchain technology and cryptocurrencies among consumers, businesses, and policymakers are crucial. Policymakers in Myanmar need to develop clear and supportive regulatory frameworks that balance innovation with consumer protection.
Andika Prawira Buana, Rizki Ramadani, Aan Aswari, Zainuddin Zainuddin
Cryptocurrency has become a key focus in the evolving landscape of virtual finance, sparking a divide among Islamic scholars. The debate centres on whether cryptocurrency should be considered permissible for transactions under Islamic law. This study explores the polarisation among scholars, some of whom permit cryptocurrency use while others prohibit it. Using normative legal research methods with statutory and conceptual approaches from an Islamic law perspective, the study draws on secondary data, including primary, secondary and tertiary legal materials. The findings reveal that some scholars oppose cryptocurrency due to its lack of intrinsic value and high volatility, which leads to gharar (uncertainty). Conversely, others argue that cryptocurrency can be permitted if limited to monetary functions and not for other purposes. The study concludes by recommending that, as cryptocurrency becomes increasingly prevalent, Islamic scholars should work to establish ijma’ (consensus) and qiyas (analogical reasoning) to form a clear basis for determining its permissibility according to Islamic principles.
Lulu Anggriani, Defa Gustara Maulana, Mahipal Mahipal
The advancement of the digital era which is increasingly widespread and commonplace has encouraged a shift in transactions that makes various transactions easier. Modern innovation in the digital era has expanded payment methods beyond the traditional use of cash and current accounts (non-physical). Many people utilize cryptocurrency as digital money, but there are unavoidable pros and cons to this technology based on the blockchain protocol. Various arguments have been put forward for and against cryptocurrencies in Indonesia. One argument is that this does not adhere to standard practices for transactions and currencies. Another argument is that the Indonesian government has firmly stated that Bitcoin and similar virtual currencies are not legal tender in the country. The widespread use of digital money in people's lives requires research and analysis from religious and technology experts considering these events and facts. Bitcoin and other cryptocurrency transactions are considered gharar and dharar from an Islamic economic perspective
Achmad Napis Qurtubi, Efendi Sugianto, Muhammad Umar Kelibia
This study investigates the legality of Bitcoin from the perspective of Fiqh Muamalah through qualitative analysis and literature review. Fiqh Muamalah, an Islamic jurisprudential framework, regulates economic transactions according to Sharia law. The research examines whether Bitcoin, as a digital currency, aligns with Islamic legal and ethical standards by analyzing scholarly articles, religious texts, and fatwas issued by Islamic scholars. Key considerations include Bitcoin's nature as a currency, its speculative role, and potential for illicit activities. Findings reveal diverse scholarly opinions, with some viewing Bitcoin as permissible under specific conditions, while others raise concerns about its speculative nature and lack of intrinsic value. This study aims to provide comprehensive insights into Bitcoin's legality within Fiqh Muamalah, offering valuable information for policymakers, financial institutions, and Muslim investors.
The rapid rise and widespread global adoption of cryptocurrencies in recent years has fundamentally transformed the international financial landscape, with digital assets increasingly being recognized for their potential to influence the stability and performance of traditional capital markets. Against this backdrop, this study aims to empirically investigate the impact of cryptocurrency returns on Islamic vs. conventional stock returns in Gulf Cooperation Council (GCC) countries. The salient distinctions between Islamic and conventional stock markets include fundamental differences in principles, investment allocations, and risk profiles, underscoring the importance of examining the impact of cryptocurrency returns on these distinct equity segments. Daily data were collected from stock indices in five GCC countries over the period 2016–2019, including two sub-periods: before and after the 2017 crypto crash. Pooled OLS, fixed effects, random effects, and generalized linear models (GLMs) were used to analyze the data collected during the study. With the GCC increasingly focusing on cryptocurrency markets, there is growing concern about these markets’ potential impact on regional stocks. This study addresses the important questions of whether the impacts of the cryptocurrency market on Islamic vs. conventional stock markets differ throughout the GCC region and how these impacts have evolved since the crypto crash period. The findings reveal that cryptocurrency returns had a negative impact on both GCC Islamic and conventional stock market returns for the full sample period (2016–2019), and the negative effect was far more pronounced for conventional stocks. For the two sub-periods before and after the crash, only the cryptocurrency market and conventional GCC stocks remained negatively correlated, while the cryptocurrency market and the GCC Islamic stock markets became uncorrelated. Thus, for the calmer sub-periods before and after the crypto crash, the rise in cryptocurrency returns may have enticed GCC investors away from conventional stocks, perhaps resulting in a decline in their investment in these stocks. Meanwhile, those who invest in Islamic stocks may not be exposed to this temptation.
Mukhlishin Mukhlishin, Abdul Wahab, Bambang Setiaji, Magomed Tazhdinov
This research investigates the management and regulatory practices of zakat maal (wealth tax) in Malaysia, Turkey, and Indonesia, aiming to provide a comparative analysis grounded in empirical data. Methodologically, the study employs a comparative qualitative analysis based on secondary data from academic literature, government reports, and institutional publications. The results show, first, Malaysia employs a centralized and technologically integrated approach, ensuring transparency and efficiency in zakat collection and distribution. In contrast, Turkey adopts a decentralized model driven by non-governmental organizations and community participation, fostering flexibility but posing challenges in standardization and oversight. Indonesia's hybrid model combines governmental oversight with private sector involvement, aiming to balance regulatory control with local adaptability, yet needs help in coordination and public trust. Second, the policy enhancements such as improved coordination mechanisms, strengthened regulatory frameworks, and enhanced public awareness to optimize Zakat's role in poverty alleviation and social welfare across Malaysia, Turkey, and Indonesia. This research contributes to the broader discourse on Islamic finance and social policy by providing nuanced insights into zakat management practices, offering valuable implications for policymakers, practitioners, and scholars interested in enhancing zakat efficacy globally.
Muhammad Izzul Syahmi Zulkepli, Nur Bakri Abd Hamid, Hazrul Hizam Karim, Mohammad Taqiuddin Mohamad
The rapid development in technology, especially smart contract technology, poses challenges in aligning its principles with the Shariah perspective. Although this technology has great potential to facilitate human affairs in various fields, including the financial, zakat and halal sectors, the gap between Shariah researchers and the understanding of this technological innovation is wide due to the complexity of smart contracts involving technical aspects and new innovations. Therefore, the purpose of this study is to explore the challenges in understanding smart contract technology from the perspective of Islamic law. A qualitative approach based on library research was applied to achieve the objectives of the study by referring to relevant documents and literature. The collected data was then analyzed using thematic content analysis methods, enabling the identification of themes and patterns in the literature related to smart contracts and Shariah principles. The results found that there is a significant gap in the understanding of smart contracts among Shariah researchers, mainly due to the technical complexities involved and limited accessibility to relevant information. To address the knowledge gap, it is important to increase access to comprehensive resources that describe the technical aspects of smart contracts along with Shariah principles. Collaboration between technologists and Shariah scholars are important to facilitate mutual understanding and bridge the gap between the two domains. Additionally, ongoing research and discourse is encouraged to refine the understanding of smart contracts within the Shariah framework.
Cryptocurrency appeared amid digital technology's growth tremendously, offering fast, transparent, auditable, and secure features. However, its presence and status in Islamic law are still debatable among the Community. Cryptocurrency is based on blockchain and has decentralized finance, contrary to the current conventional system, namely central banks. The purpose of this study is to see community resistance over cryptocurrencies and its views on the Islamic perspective. This study is qualitative with a phenomenology approach. Data sources were obtained through in-depth interviews and structured ones. The analysis carried out in this study used the maqashid sharia approach, fiqh rules, and ushul fiqh. The result of this study showed that the concept of decentralized finance has yet to be able to take over the role of central banks. The majority of perspectives provided by the ulama, who were consulted as primary sources in this research, maintain the belief that cryptocurrency remains an unreliable medium of exchange and a risky long-term asset.