Purpose: This study aims to examine the impact of behavioral finance factors on the investment decisions of Gulf investors in the cryptocurrency market. Theoretical Framework: The study is based on the behavioral finance theory, which highlights the role of emotions and cognitive biases in shaping investment decisions. It examines the investment behavior and decision-making of Gulf investors in the cryptocurrency market using a comprehensive set of factors, including herding, heuristics, prospect, market, familiarity bias, and self-attribution bias. Design/Methodology/Approach: Primary data is collected through a survey-based approach using a 23-question distributed at the country level covering the United Arab Emirates, Kuwait, Qatar, and Saudi Arabia. The study analyzes the data collected using statistical methods to study the impact of behavioral finance factors on the investment decisions. Findings: The results show that herding and heuristics strongly influence investment decisions in the cryptocurrency market among Gulf investors. The prospect factor positively affects investment decision-making in KSA and Qatar but not in UAE and Kuwait. The market factor is a significant determinant of investment behavior, and investors in UAE and Qatar are more cautious and risk-averse compared to KSA and Kuwait. The familiarity bias factor has different effects on investment decision making in KSA and UAE. Research, Practical & Social Implications: This study offers valuable insights into how behavioral finance factors impact investment decisions in the cryptocurrency market. These findings can be useful to investors and financial institutions in developing investment strategies that take into account the cognitive and emotional biases of investors. Originality/Value: The study uses a comprehensive set of behavioral finance factors and includes respondents from four Gulf countries. Therefore, the study contributes to the existing literature by providing unique insights into the investment behavior and decision-making of Gulf investors in the cryptocurrency market.
Auwal Adam Saâad, Raja Rehan, Abubakar Abukakar Usman, Adnan Opeyemi Salaudeen
<ns4:p>The metaverse is a virtual world that exists alongside the actual world. While the actual world refers to the real, physical world, the metaverse is a digital world that is accessed through technology. Evidently, several international brands have integrated their businesses with the virtual metaverse providing business opportunities. However, there are currently several gaps in the sector of Shariah finance that need to be addressed in order to take full advantage of the potential of the metaverse. For instance, rare studies enlighten the concept of Ijarah, a substitute for conventional leasing in the metaverse virtual world. Undoubtedly, the metaverse has the potential to revolutionize the Shariah finance industry by providing new opportunities for financial inclusion and innovation. Therefore, for the readiness of Islamic finance institutions, this study is an attempt to explore the possibility of executing Shariah principles that could be utilized in the metaverse. More specifically, this study is an endeavor to explore and discuss how Shariah-based leasing i.e., Ijarah integrates with the recent metaverse technologies. Additionally, this study also discusses the metaverse evolution and its integration into international business brands, the metaverse virtual assets ownership, the metaverse virtual leasing, non-fungible tokens (NFTs), and virtual real estate in the metaverse. Indeed, this study is a novel addition to the Shariah finance literature, which helps policymakers to generate new strategies that guide the execution of Ijarah contracts in the virtual universe of the metaverse.</ns4:p>
This study investigates diversification potential in the Malaysian and United States (US) Islamic stock indices, Bitcoin, gold, and crude oil prices, particularly amidst economic crises. It uses wavelet coherence and MGARCH-DCC on a dataset spanning 2014 to 2022. The findings revealed that there are diversification potentials for investors. The dynamic conditional correlation (DCC) analysis indicated that the correlation of gold with both indices is generally low, except for a brief period of heightened correlation during the COVID-19 pandemic in 2020. The correlations between bitcoin and Islamic Stock Index Returns (ISIR) of the US and Malaysia respectively are generally weak across the study period except during the pandemic for the US. Hence, it is prudent for investors with exposure to the countries' stock index to incorporate gold within their portfolio to harness diversification benefits. The results further suggested that Bitcoin is also an appealing option for portfolio diversification. Our findings further revealed that during the Russia-Ukraine conflict, crude oil had demonstrated a minimal correlation with both the US and Malaysia ISIR, providing an opportunity for diversification. The results further suggested that Islamic equities can be a buffer against risk and instability, especially during turmoil, offering crucial implications for Shari'ah-compliant investors in Malaysia and the US. The study points to the need for further investigations incorporating additional economic shocks to understand diversification opportunities across varying investment horizons and holding durations.
Suffian Haqiem Nor Azelan, Asmak Ab Rahman, Mohd Shahid Mohd Noh
Penggunaan teknologi baru dalam bidang kewangan ataupun fintech telah mengubah sistem-sistem kewangan sedia ada. Salah satu produk fintech yang memberi kesan kepada persekitaran kewangan global ialah mata wang kripto. Lebih daripada sepuluh ribu jenis mata wang kripto yang berbeza wujud sekarang, dengan jumlah nilai pasaran $1.30 trilion. Mata wang kripto juga dilihat berpotensi untuk menjadi alternatif terhadap sistem mata wang sedia ada. Berdasarkan sejarah, sistem mata wang dunia berevolusi dan berubah sesuai dengan peredaran zaman dan kepesatan perkembangan teknologi. Timbul persoalan adakah mata wang kripto mampu untuk menggantikan mata wang sedia ada suatu hari nanti. Kajian ini akan membincangkan konsep mata wang kripto sebagai mata wang dari perspektif syariah.
The popularity of virtual currencies has increased markedly in recent years. Seminars and conferences have explored the properties and sustainability of cryptocurrencies. Some argue that an alternative to the current fiat currency system would be beneficial, as it would not mandate the use of a bank account, tax payments, or audits as do the said cryptocurrencies. Alternative methods of payment, aside from those commonly accepted like cash, checks, and DD, have been claimed to enable tax and auditing avoidance. However, this view has been contested, given the potential negative impact on the economy and the government budget. The present study addresses the challenges and limitations involved in considering bitcoins to be halal. It has been determined that cryptocurrencies are not considered Halal in Islam because they lack intrinsic value and are subject to significant regulatory oversight. Popularitas mata uang virtual telah meningkat pesat dalam beberapa tahun terakhir. Seminar dan konferensi telah mengeksplorasi properti dan keberlanjutan mata uang kripto. Beberapa orang berpendapat bahwa alternatif dari sistem mata uang fiat saat ini akan bermanfaat, karena tidak mengharuskan penggunaan rekening bank, pembayaran pajak, atau audit seperti halnya mata uang kripto. Metode pembayaran alternatif, selain dari yang umum diterima seperti uang tunai, cek, dan DD, telah diklaim memungkinkan penghindaran pajak dan audit. Namun, pandangan ini telah diperdebatkan, mengingat potensi dampak negatifnya terhadap ekonomi dan anggaran pemerintah. Penelitian ini membahas tantangan dan keterbatasan yang terlibat dalam mempertimbangkan bitcoin sebagai sesuatu yang halal. Telah ditetapkan bahwa mata uang kripto tidak dianggap halal dalam Islam karena tidak memiliki nilai intrinsik dan tunduk pada pengawasan regulasi yang signifikan.
The notion behind Islamic finance is providing alternative Shariah-compliant financial services and products for those who do not willing to access conventional finance as it contravenes Shariah principles. Currently, Islamic finance is expanding throughout Muslim and non-Muslim countries. One of the most critical challenges of the Islamic financial sector is the extent of the compliance of Islamic finance practices with Shariah principles. Therefore, there should be a control mechanism for ensuring the compliance of the products and services provided by Islamic financial institutions with Shariah principles. Scholars argue that a Shariah governance framework should be applied by institutions engaged in Islamic finance in countries where Islamic finance is being practiced. Shariah governance framework is mainly categorized into two approaches centralized and decentralized Shariah governance framework. The availability of a centralized Shariah governance framework is essential in ensuring the application of Islamic finance in accordance with Shariah principles. Ethiopia is one of the countries that accommodated the application of Islamic finance through exclusively interest-free banking windows by conventional banks in 2011 and fully-fledged interest-free banks in late 2019. However, the National Bank of Ethiopia (NBE) did not specify any Shariah governance framework in any of its legislations. The unavailability of an established Shariah governance framework may expose the sector to Shariah non-compliance risk. This study investigates how to ensure Ethiopia's Islamic finance applications' compliance with the Shariah principles. Semi-structured interviews and document studies were conducted with 15 respondents, including experts in Islamic finance, Shariah scholars, and Islamic finance practitioners, to collect the needed data for this endeavor. The findings indicate that interest-free banks, especially interest-free banking windows, do not give the necessary attention to the issue of the Shariah governance framework. The presumed manifestations of Shariah compliance in Ethiopia are having Shariah advisory committee, using Arabic words and names for their products and services, declaring they are following the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), Islamic Financial Services Board (IFSB) standards, and participating in corporate social activities. However, these claims are insufficient to argue that their products and services are Shariah-compliant, as long as an external authorized body should oversight and control their application. In addition, the results indicate that adapting the AAOIFI standards to the extent of industry development is recommended to ensure Shariah compliance in Ethiopia. Besides, considering responsible stakeholders in ensuring Shariah compliance, government/NBE and financial institutions engaged in Islamic finance are identified as primary stakeholders. On the other hand, the Ethiopian Islamic Affairs Supreme Council (EIASC), religious scholars and institutional Shariah advisors, interest-free professional associations, academicians in Islamic economics and finance, and educational institutions are considered secondary stakeholders. In addition, the findings also indicate that the policymakers' approaches of TĂŒrkiye, Malaysia, Kenya, and South Africa to the Islamic finance industry could be the best model for policymakers in Ethiopia. Establishing a centralized Shariah advisory committee under the NBE is recommended to ensure the compliance of interest-free finance applications with Shariah principles in Ethiopia. To this endeavor, all stakeholders such as government/NBE, financial institutions engaged in the Islamic finance industry, EIASC, religious scholars and institutional Shariah advisors, interest-free professional associations, academicians in Islamic economics and finance, and educational institutions should play a significant role by fulfilling their respective responsibilities.
Oishi Chowdhury, Md Al Samiul Amin Rishat, Md. Al-Amin, Md. Hanif Bin Azam
Shariah-based banking aims to apply Islamic finance while adhering to Shariah principles.The primary distinction between conventional and Islamic finance is that Sharia law explicitly forbids several of the activities and principles applied in conventional banking.According to Sharia law, "Paying or charging an interest (Riba)" lending with interest payments as an exploitative practice that benefits the lender at the expense of the borrower, "investing in businesses engaged in banned activities" like producing and selling alcohol or pork, "speculation or gambling(Maisir)" That means financial institutions are prohibited from participating in contracts where the ownership of goods depends on an unpredictable future event, and Participation in contracts with a high level of risk or uncertainty is referred to as "uncertainty and risk (Gharar)", which are strictly prohibited.As a result, consumers must be aware of whether they are taking Riba, Gharar, Maisir or if their money is invested in a halal firm.Because of its qualities, blockchain would be useful in this situation.This research tries to determine how blockchain technology can be used to make investments and profit or loss returns more transparent, more secure, Immutable and sharia compliant.Blockchain networks can be utilized in the financial industry, such as banking, to provide safe sharia banking.
There are various views concerning the cryptocurrency issue. The majority of scholars and world Islamic bodies, such as Dar al-IftÄ 'al-MiáčŁriyyah (Egypt), Dar al-IftÄ' al-Falasteeniyya (Palestine) and the Turkish Directorate of Religious Affairs, do not permit cryptocurrency for various reasons, including the existence of uncertainty (gharar), risk (khatar) and the fact that it facilitates (wasilah) the crime of fraud and money laundering. However, some Islamic financial and religious scholars do permit it. One scholar who views cryptocurrency positively and believes that it should be permitted is Mohd Daud Bakar, who is the Chairperson of the Shariah Advisory Council of Securities Commission Malaysia (SC) and former Chairperson of the Shariah Advisory Council for Bank Negara Malaysia (BNM). He is also former President of the International Islamic University (IIUM) and the chairperson or international Shariah advisor at various financial institutions around the world, including the S&P Islamic Index and Dow Jones Islamic Market Index (New York). His extensive experience of more than 25 years in this dynamic field has made him a leading and important reference expert. In 2015, in a report released by the Global Islamic Finance Report (GIFR), he ranked sixth among the worldâs 10 Islamic finance experts. This success has made him an expert, not only in the field of Usul al-Fiqh which is the core knowledge base of Islam, but also beyond the field of Islamic finance and law. This paper analyses the validity of Mohd Daud Bakarâs views on cryptocurrencies within the scope of Usul al-Fiqh according to the âillah, âurf, sad zaraiâ and fatáž„ zarÄiâ methods. This qualitative study had obtained data from Facebook Live video recordings, reports and articles, which were then analysed using the descriptive content analysis method. It can be concluded from an âillah (legal operative cause) aspect that there is no acceptable âillah for banning this currency. From the point of view of al-âurf, cryptocurrencies are acceptable and do not contradict the principles of Shariah. Whereas from the point of view of sad zarÄiâ, this study found no solid evidence that it could lead to deleterious circumstances other than mere conjecture and assumption, hence, the introduction of cryptocurrencies should be permitted or made accessible. He also suggested the use of the fath zarÄiâ method, which is better suited for creating opportunities for innovation and creativity of financial products based on financial technology (fintech). Finally, he mentioned about the permissibility of cryptocurrency as a medium of exchange even if it does not become the legal currency of a country.
This study explores the dynamic co-movement of Islamic asset classes and cryptocurrencies for the period 01 March, 2017 to 15 June, 2022 by employing Wavelet methodology. The Islamic investment classes are represented by Islamic equities, Islamic Socially responsible investments, Real estate investment trusts and Sukuk. The results reveal that in normal times, there is negligible co-movement of both the asset classes. By contrast, both the investment classes exhibit significant spillover effect during the health crisis period. An important implication from these findings is that both the asset classes offer diversification opportunity during normal times but not during extreme times.
Abstract: Muslim scholars and experts have given their views on issues related to the permissive and prohibitive use of cryptocurrencies. Scholars and expertsâ decisions were of three categories: permitted the use of cryptocurrency; prohibited its use based on Islamic principles; and tawaqquf, yet to make their final decision on the acceptance or otherwise. The main objective of this study was to systematically examine and organize the various studies and research that explored known common ideas among Muslim scholars and experts on issues related to the use of cryptocurrency in Muslim communities. This study adopted the PRISMA guideline of reporting a systematic literature review, where it identified and explored available literature in Scopus, Emerald Insight, and Google Scholar, related to Muslim scholars' and expertsâ decisions on the use of cryptocurrency. With the increasing use of cryptocurrency globally, the topic has also rapidly grown among Muslim scholars and experts, which has created a need for a real conclusion and justification for the people to hold on to. The systematic literature review revealed that the Muslim scholars and expertsâ views on cryptocurrencies can be sub-categorized further: permitted its use (requirements compliant, regulations, justified reasons, wide acceptance, and gold-backed), prohibited its use (speculative nature, restrictions by authorities, fewer benefits, and religious beliefs), and tawaqquf (potentials for improvement, PMBC, Islamic cryptocurrencies, and backed Dinar and Dirham crypto). The conceptual contribution of this study was that views expressed by Muslim scholars and experts on cryptocurrencies be categorized for public consumption and guide in understanding issues. Abstrak: Sarjana dan pakar Muslim telah memberikan pandangan mereka tentang isu berkaitan permisif dan larangan penggunaan mata wang kripto. Keputusan ulama dan pakar terdiri daripada tiga kategori: membenarkan penggunaan mata wang kripto; melarang penggunaannya berdasarkan prinsip Islam; dan tawaqquf, belum membuat keputusan muktamad mengenai penerimaan atau sebaliknya. Objektif utama kajian ini adalah untuk mengkaji dan menyusun secara sistematik pelbagai kajian dan penyelidikan yang meneroka idea-idea umum yang diketahui di kalangan sarjana dan pakar Islam mengenai isu-isu yang berkaitan dengan penggunaan mata wang kripto dalam masyarakat Islam. Kajian ini menerima pakai garis panduan PRISMA untuk melaporkan tinjauan literatur yang sistematik, di mana ia mengenal pasti dan meneroka literatur yang terdapat dalam Scopus, Emerald Insight dan Google Scholar, yang berkaitan dengan keputusan pakar dan sarjana Muslim tentang penggunaan mata wang kripto. Dengan penggunaan mata wang kripto yang semakin meningkat secara global, topik ini juga telah berkembang pesat dalam kalangan sarjana dan pakar Muslim, yang telah mewujudkan keperluan untuk kesimpulan dan justifikasi sebenar untuk dipegang oleh orang ramai. Kajian literatur sistematik mendedahkan bahawa pandangan ulama dan pakar Muslim tentang mata wang kripto boleh dikategorikan kepada: dibenarkan penggunaannya (mematuhi keperluan, peraturan, alasan yang wajar, penerimaan meluas, dan disokong emas), melarang penggunaannya (sifat spekulatif, sekatan oleh pihak berkuasa, faedah yang lebih sedikit, dan kepercayaan agama), dan tawaqquf (potensi penambahbaikan, PMBC, mata wang kripto Islam dan kripto Dinar dan Dirham yang disokong). Sumbangan konsep kajian ini ialah pandangan yang diutarakan oleh para sarjana dan pakar Islam mengenai mata wang kripto yang dikategorikan untuk kegunaan awam dan panduan dalam memahami isu ini.
Azlin Alisa Ahmad, Mat Noor Mat Zain, Ranitya Ganindha, Reka Dewantara
Smart contracts are contracts that are executed using blockchain technology and operate in a decentralized, pseudonymous manner and recorded digitally based on computer protocols. However, their implementation raises concerns from an Islamic perspective due to potential ethical and legal issues, such as ambiguous contractual terms, lack of transparency, and potential manipulation of the system by malicious parties. These issues can lead to activities that contradict Islamic principles. This qualitative study, which employs the content analysis for collecting data, aims to examine the potential for manipulating smart contracts from an Islamic perspective. Smart contracts are permissible in Islam as long as they fulfill all the fundamentals and requirements of a contract as well as do not contain elements that may contradict an Islamic contract, including uncertainty of the contracting parties, as well as manipulation of the autonomous system, contractâs subject matter, and the contractâs objectives. This paper found that smart contract transactions contain several elements that are inconsistent with Islamic contract principles, including elements of uncertainty on the part of the contracting parties, as well as manipulation of the autonomous system, and the contractâs subject matter and objectives. Therefore, the controller of smart contracts needs to design an approach that is Shariah-compliant to prevent conflicts and enable its widespread use, especially by Muslims.
Abstract: The public and private sectors are both in control of a wide range of security-related issues, and Blockchain is a promising technology that is gaining popularity for doing so. Charitable organizations are growing more and more interested in Blockchain technology. Due to the lack of transparency in the transactions involving donations, which hinders donors from understanding whether their contributions are being used properly, people have lost faith in charity. A decentralized Blockchainbased donation tracking system is proposed in the article, which will provide total transparency,accountability, and direct access to the intended receivers. It will be used in Ethereum Blockchain implementation.
Ahmed Bossman, Mariya Gubareva, ĐąĐ°ĐŒĐ°ŃĐ° ĐąĐ”ĐżĐ»ĐŸĐČĐ°
The attractiveness of the equities of the Islamic faith-compliant companies as a hedge or possible diversifier has been underscored; however, there is a lack of empirical research on their safe-haven and hedge attributes against changes in the level of cryptocurrency environmental attention (ICEA). We examine whether various distributions of the ICEA possess a significant predictive power on various quantiles of Islamic sectoral stock returns by employing weekly data on the ICEA and Shariah-compliant stocks from 10 sectors of economic activity and base their multi-scale analysis on the complete ensemble empirical mode decomposition (CEEMDAN) approach. We present the asymmetric causality-in-means and quantile-on-quantile regression between the ICEA and Islamic stocks. The empirical results show a significant predictive power of the ICEA on various quantiles of Islamic sectoral stocks in the medium- and long term. We find that the safe-haven and hedging attributes of investments in Islamic stocks are sector-dependent across the medium- and long-term scales. Hence, our findings emphasize that based on market states, possible safe-haven attributes, diversification opportunities, and hedges for cross-sectoral investments with Islamic stocks are viable along various investment horizons for diverse levels of cryptocurrency environmental attention. These findings provide original valuable insights for portfolio management and improving financial stability.
Abstract: NGOs in developing nations get financing from donor agencies for various goals, including disaster assistance, education advancement, womenâs empowerment, and economic development. However, due to reports of fund misuse and record irregularities, some donor agencies have lost faith in these NGOs.For example, in education funding, some students appear onthe records of multiple NGOs as beneficiaries, even though only one NGO should be paying for a specific student, so here blockchain plays an important role, The lack of transparencyin charities has resulted in a decrease in social investment and a decrease in donor confidence, as donors are frequently uninformed of how their donations are being used. Corruption exacerbates this skepticism. To address these challenges, the Charity-Chain decentralized network has been suggested, which will use the Ethereum blockchain and smart contract-based incentives to validate the impact of social organizations. This improved transparency would help funders, such as charitable organizations, impact investors, and small donors, to more readily monitor their transactions and re-establish trust in these social organizations.
The widespread use of innovative technologies in the Arab countries began relatively recently; the COVIDâ19 pandemic became a powerful impetus to their promotion. However, the crises experienced by global financial markets have forced investors to look for more «safe havens» for their investments. In this regard, the development of the (nonâfungible tokens, hereinafter â NFT) in the last two years has become a relatively safe place to invest. NFT technologies were originally designed for the world of art, artists, clip makers, people of creative professions and admirers of their creations, but NFT went further and began to become popular in the world of finance becoming one of the instruments for making transactions. The Arab countries did not stand aside from such innovations actively participating in the development, testing and search for new innovative areas of NFT application. However, you should not forget about the strict rules of Sharia which apply to all types of financial activities. The necessary interconnection and problem points are yet to be analyzed by experts in the future as the market develops but at the same time it is already worth talking about the rapid introduction of NFTs into Islamic finance.
Wicaksono Ahmad Tibrizi Soni, Mufraini Arief, Titis Miranti, Muttaqien Muhammad Khaerul
Abstract The study explores the most powerful between Bitcoin and Gold in boosting the Shariah Equity Index in Malaysia, the United Arab Emirates, China, Indonesia, The United States of America (USA), Japan, Oman, and Saudi Arabia in the short and long term. The study uses analysis of the first and second stages of the Granger Causality Test and Vector Error Correction Model (VECM), then Impulse Response Function (IRF) and Variance Decomposition (VDC) over the period 2013 to 2021. The finding proves that only Gold can affect the Islamic Equity Index in the short term, then Bitcoin and Gold proved to contribute equally to the Islamic Equity Index in the long term. However, Bitcoin has the potential to provide positively correlated shocks and dominate the value of Islamic equity indices in the long term. The results demonstrate that government intervention is decisive in maintaining the stability of the Shariah Equity Index from future Bitcoin threats. The studyâs finding has practical implications for Islamic capital market Investors, Managers, and Authorities.
Non-fungible Token atau NFT telah mengambil perhatian masyarakat umum. Sekarang, publik berlomba-lomba untuk mencari cara untuk menjual dan membeli NFT sebagai bentuk investasi. Fenomena ini memiliki risiko dan peluang. Untuk itu, penelitian hukum ini akan menganalisis NFT dengan regulasi yang telah ada. Penelitian ini menggunakan metode penelitian doktrinal. Penelitian ini difokuskan untuk membahas potensi NFT secara hukum dan apakah hukum nasional siap untuk perubahan ini. Penelitian ini juga menunjukkan adanya pelanggaran kekayaan intelektual (hak cipta) yang selalu diperdebatkan di NFT. Oleh karena itu, masyarakat harus dididik sebelum mencoba mendalami NFT. NFT cenderung menjanjikan tetapi menurut penelitian ini, NFT memiliki beberapa celah yang dapat mengakibatkan masalah hukum seperti penipuan, pencucian uang, dan penghindaran pajak. Maka, pemerintah perlu mengambil tindakan pencegahan dan pengawasan di pasar NFT untuk memastikan keamanan serta tidak terjadinya pelanggaran saat menggunakan platform NFT.
The objective of this paper is to analyze the debate about cryptocurrency as money from an Islamic point of view. Money in Islam that is based on urf of custom has also some requirements, such as its stability. Some fatwas in Indonesia regarding the legitimacy of cryptocurrency must be evidenced with an empirical-based. The study used 25 cryptocurrency prices and related information. By employing ARCH and GARCH, the study revealed that cryptocurrency is hugely volatile and, thus, does not fulfill such criterion as money from an Islamic perspective, and is normally used for speculation. Hence, this study suggests that cryptocurrency is still reluctant to be used for a transaction.
This paper investigates the impact of the realized volatility of positive and negative intraday Bitcoin returns on the sensitivity of Shariah-compliant stocksâ orthogonalized returns. We identify the impact in different market states and find that Bitcoinâs upside volatility negatively affects the returns of Islamic equities. The paper contributes to uncovering the properties of a niche Islamic Emerging Asian equity market. The findings offer important implications for investorsâ diversification strategies.
This research considers a new dimension of the effects of the underground sector by examining the spillovers on cryptocurrency holdings. Cryptocurrencies offer a relatively greater ability to dodge taxes and ensure the anonymity of holders, providing attractive avenues for underground operators to stash their informal-sector earnings. Our results, based on data from more than 50 nations, show that a greater prevalence of the underground economy in a nation is indeed associated with greater cryptocurrency holdings. This result holds across an alternative measure of the shadow economy, and when the bi-directional causality between the shadow economy and cryptocurrency holdings is considered. In other noteworthy findings, greater FDI crowded out cryptocurrency holdings, while greater financial globalization and greater economic uncertainty, ceteris paribus, increased them.
Money has undergone numerous form changes throughout history, and as a replacement for the current system, it has started to take on a digital form. The newest kind of money is a cryptocurrency, which was created decentralized from any central authority. The range of applications for cryptocurrency is expanding daily. One of the most widely used cryptocurrencies is bitcoin, which was launched in 2009, ruled the cryptocurrency market, and caught the attention of the general public with its quick price increase. Early in 2018, the cryptocurrency market was worth more than $800 billion. The majority of cryptocurrency users seek to benefit from rising cryptocurrency values. These actions, however, do not adhere to the principles of cryptocurrencies. In terms of Islamic law, cryptocurrencies also present issues with legitimacy for users who are Muslims (Fiqh). Some Islamic scholars believe that cryptocurrencies are halal, notwithstanding the claims of many religious organizations and Islamic experts that they are haram. Descriptive analysis and content analysis are used in this paper. The findings of this study suggest that using Bitcoin and other cryptocurrencies are forbidden in Islam. Islam prohibits consciously trying to make money off the difference between buying and selling currencies, as this is considered riba.
Khairil Faizal Khairi, Nur Hidayah Laili, Hisham Sabri, Azuan Ahmad · 6 authors
Zakat in Islam has historically been a vital institution in fulfilling religious needs and social welfare. Its effectiveness in medieval and modern Islam is evident. However, this institution is seemingly not without inefficiencies. Ineffectiveness distribution process and lack of transparency in the zakat management are commonly cited as key impediments (bin Khatiman et al., 2021). Blockchain is expected to solve these issues due to its ability to record and trace every transaction, allowing administrators to discharge their accountability to zakat stakeholders. Thus, this study intended to develop a zakat collection blockchain system with the aim to provide economical and integrated continuous real-time zakat transactions, transparency and traceability by developing smart contracts in zakat management. The study employed four stages of process based on waterfall model starting from the interview session and analyse of the standard operating procedure (SOP) on zakat collection in the Zakat Collection Centre or Pusat Pungutan Zakat-Majlis Agama Islam Wilayah Persekutuan (PPZ-MAIWP). Then, design requirement specification (DRS) is employed after being reviewed and approved by PPZ-MAIWP. The results show that the development of blockchain in the zakat collection system could be eradicating extreme poverty and boost shared prosperity among the community in the country. The study contributes through a transparent and reliable environment for exchanging data and carrying out transactions through a decentralized digital ledger technology to record anything of value and as a result able to ensure transparency, reliability, trust ability and traceability of the zakat transactions.
Fauzan Muhammadi, Nor Fahimah Binti Mohd Razif, Rahimin Affandi, Abdul Rahim
Currently our life has stormed by fast development of meta-technology that could transform physical being into digital verse.This fact has affected many issues, one of which is mortgage activities.The problem is that we tend to follow debating issues on its several controversies and not trying to foretell on what side it could be a shariah compliant.The study aims to forecast meta-mortgage activities in accordance with Islamic Shariah.This article uses qualitative study which employs secondary data.Those data analyzed through desk activities and it narrated descriptively in consecutive logical structure.There are two issues that have been discussed by Islamic scholars on Islamic mortgage, both are utilization of cryptocurrency and the Non-Fungible Tokens (NFTs).The based issue on cryptocurrency is its volatility and the issue behind NFTs is its legal ownership that frequently has been violated.The adaptation of metaverse on mortgage activity will not occur when both mentioned-issues are not legally cleared.Thus, the possible image of the adaptation is likely in the far future, it depends on how far the legal regulation (laws and fatwas) will answer the shariah compliant on metamortgage.