Program Studi Teknik Informatika, Universitas Telkom, Sarah Suryaningsih, Yoga Riandika, Program Studi Teknik Informatika, Universitas Telkom · 8 authors
Waqf has an important role in one aspect of Islamic in the economic sector. For document and evidence, waqf noted by nazir (receiver, guard, who maintains waqf) with paper and receipt. That is very vulnerable to losing waqf data which is because it is only documented by paper which is easy to lose or damaged. Based on that problem, then the waqf application based blockchain technology was developed which Aims to securing record data of waqf transaction so as not to be lost or hacked by irresponsible people, other than that for increase effectiveness in executing waqf transaction from wakif (a person who donates his property) side and nazhir (receiver, guard, who maintains waqf) side. The data collection methods used in this article are questionnaires and also interviews. This article confirms that waqf could be stored even better in security effort and saving data which is done digitally via website and android application. The results of the research which got a total result 95% with very feasible criteria, therefore the result of this research from this application have a very feasible score to be implemented for available waqf transaction because it has given more secure and effectiveness for the user.
Blockchain is an open distributed database that carries out transactions on an open decentralized ledger. It is a technology that will probably be the source of a huge digital change especially in the financial sector. The application of this technology has started to take its first steps recently and its importance is undeniable in an emerging and expanding field such as Islamic finance. In this context, the purpose of this article is to study the integration of the blockchain and one of its important components, namely the smart contract in the management of the compulsory Islamic charity the zakat. To do this, we have developed a funding model linking all the stakeholders in question and the diversities of blockchain technology. We were thus able to conclude huge benefits and technical contributions in this context which encourages Islamic financial institutions to develop more models likely to support this technology without ignoring the compliance with the Islamic jurisprudence rules.
In Islam, the extension of religious regulation and certification to new product types and economic sectors—“halalization”—has become widespread. There are now Islamic mortgages, halal ports, halal refrigerators, halal blockchain, and shariah-compliant cryptocurrencies. Yet classical secularization theory says religious authority cannot regulate modern economic activity. So what explains halalization? I point to an elective affinity between fiqh (Islamic jurisprudence) and twenty-first-century markets. Contemporary fiqh offers widely respected religious jurists who issue fatwas certifying products. Entrepreneurs empanel the jurists on certification boards, allowing fiqh to function as a regime of voluntary regulation layered atop secular state law instead of conflicting with it. Indeed, secular liberal markets provide ideal conditions for halalization and religious meaning-making through consumption. Case studies of Islamic finance and halal logistics show how entrepreneurs assuage consumers’ religious anxieties—and generate new ones—in the context of globalization and liberalization in secular markets.
Sukuk are the most popular Islamic products and have experienced the most development and development since their launch. However, this market suffers from large numbers of obstacles and challenges that the Islamic financial community is committed to containing and solving them. The non-standardization of practices, the high costs of the issuing operation, and in particular the lack of diversity of investors and issuers of sukuk, which currently is limited to governments and large companies, are all among the main development challenges. of the sukuk market. Thus, and by their specificities which make it possible to stall this large number of obstacles, the "smart Sukuk" have become the future of emissions of sukuk in the Islamic financial industry. Their structure using blockchain and smart contract technology improves transparency and eliminates fraud and speculation in sukuk transactions. This new way of issuing sukuk has also been designed to avoid the participation of intermediaries and save their additional costs, which is currently one of the main obstacles to the development of the current sukuk market. In our article, we are committed to studying the central question: Blockchain and smart sukuk, are they a new determinant of development of the sukuk market? Thus, we will present the smart sukuk, their application methods, their current uses and we will focus on their specificities which allow to overcome the current obstacles of the development of the sukuk market.
Rana Mahmoud Abdou, Hamdy Mahmoud Kadous, Ahmed Elsayed Hamdallah
The rapid development of cryptocurrencies has attracted the attention of investors, speculators, regulators, and academics in recent years. A large amount of research has been devoted to the pricing mechanisms of cryptocurrency markets, the drivers of volatility and the diversification potential of cryptocurrencies. (Kurka, 2019, P.38). bitcoin is the best-known cryptocurrency which currently holds the largest market capitalization and is regarded as a standard example of a cryptocurrency.( Jaywant, 2019 , P.147) bitcoin has emerged as the most popular virtual currency, and maintains the greatest share ahead of its competitors; the Ethereum, Ripple, Litecoin and bitcoin Cash. (Vardar & Aydogan , 2019 , P.2 )جذب التطور السريع للعملات المشفرة انتباه المستثمرين والمضاربين والمنظمين والأکاديميين في السنوات الأخيرة. تم تخصيص قدر کبير من الأبحاث لآليات التسعير الخاصة بأسواق العملات المشفرة ، ومحرکات التقلب وإمکانية التنويع في العملات المشفرة. عملة البيتکوين هي العملة المشفرة الأکثر شهرة والتي تمتلک حاليًا أکبر قيمة سوقية وتعتبر مثالًا قياسيًا للعملة المشفرة. برزت عملة البيتکوين باعتبارها العملة الافتراضية الأکثر شعبية ، وتحتفظ بأکبر حصة في المستقبل من منافسيها) الايثيرم ، الريبل ، اليتکوين والبيتکوين کاش).
Mücahit Özdemir, Zeyneb Hafsa Orhan, Hüseyin Burgazoğlu
This chapter examines the cryptocurrencies within the framework of recent developments in Islamic economics and aims to contribute to the effort to understand the phenomenon. It then examines the technical features of blockchain technology and cryptocurrencies. The chapter also mentions the views of the leading scholars/religious authorities in the Islamic world regarding cryptocurrencies and practical initiatives. It discusses the potential that cryptocurrencies can offer to Islamic economics and raises some issues for further studies. Blockchain technology enables peer-to-peer money transfer without the need for any intermediary institutions. The most innovative feature of Bitcoin is that it functions as a monetary system outside a central authority. Bitcoin is the reference point for the majority of fatawa for cryptocurrency. This fatwa about Ether will undoubtedly open new debates, both particularly in the academic field in the Islamic world and the legitimacy of cryptocurrency in general.
Uncertainties might compel many investors to hedge by buying globally traded assets, such as Bitcoin, which has also been used as a means of payment in several countries. Bitcoin does not originate from any centralized authority and cannot entirely be controlled; therefore, Bitcoin usage might potentially pose issues to the monetary authorities within a country. This paper analyzes the effect of both global and domestic uncertainty on Bitcoin's demand in Indonesia. Our result suggests that Bitcoin is used for hedging against uncertainties. The monetary policy implications of our results are also discussed.
Blockchain is an open distributed database that carries out transactions on an open decentralized ledger. It is a technology that will probably be the source of a huge digital change especially in the financial sector. The application of this technology has started to take its first steps recently and its importance is undeniable in an emerging and expanding field such as Islamic finance. In this context, the purpose of this article is to study the integration of the blockchain and one of its important components, namely the smart contract in the management of the compulsory Islamic charity the zakat. To do this, we have developed a funding model linking all the stakeholders in question and the diversities of blockchain technology. We were thus able to conclude huge benefits and technical contributions in this context which encourages Islamic financial institutions to develop more models likely to support this technology without ignoring the compliance with the Islamic jurisprudence rules.
The reality is that we live in a society where a small group of people thinks they know better than we do and how we should live our lives. They don’t ever seem to realize that the power and wealth they surround themselves with is only possible because of the quiet acquiescence of the majority. They say employment is a record high, but fail to say wages have been going down in real terms for decades. This wall street elites and big head of governments and pharmaceutical businesses constantly keep telling the general population how great everything is but deep down we all know it’s not true as Recent estimates for global poverty are that 8.6 percent of the world, or 736 million people, live in extreme poverty on 1.90 dollars or less a day, according to the World Bank but we know in our bones it’s not true. But it could be and through technology, it will be. As the only answer to political and financial problems that assail us is to step outside the circus. That’s where cryptocurrencies come in, as they offer a secure form of transferring or recording ownership of our assets and the most important part is they function completely independently of governments. Whether you are with or against them cryptocurrencies represent one of the biggest bull markets in the history of finance and it’s the only boom that comes close to the California gold rush. So as a future Muslim Moroccan scientific researcher in the field of Cybersecurity and block-chain technology I couldn’t help but wonder how could we use this technology in my country to revolutionize the banking and Financial sector in it and especially after I learned that Morocco prohibited the use of bitcoin back in 2017. I then found myself asking the following questions: how does cryptocurrency conform to sharia’s Islamic teaching especially in Morocco? And how could the use of cryptocurrencies send shock waves across the Middle East?
Azlin Alisa Ahmad, Mat Noor Mat Zain, Nur Diyana Amanina Zakaria
<p>A smart contract is a computer protocol contract of which its innovation rooted from the traditional contract. However, Sharia-compliant transaction necessitates a contract to fulfils all pillars of Islamic contracts in order smart contract can be accepted as an innovation of Islamic contracts. Thus, this paper aims to make a comparison between Islamic contracts and smart contract on blockchain. This paper is a qualitative research by adopting content analysis method to analyze some related topics. The pillars of Islamic contract are compared with the smart contract to ensure whether the smart contract follows the guidelines of Islamic contract or vice versa. The analysis shows that smart contract does not entirely comply with the Islamic principles of a contract. Even though smart contract generally has three pillars of Islamic contract but in details, it does not comply with the Sharia principles. By comparing between the pillars of Islamic contract and smart contract on blockchain, it shows that smart contract on blockchain is not underline with the Islamic contracts pillars. Contracting parties participate in the smart contract does not recognize each other that can be lead to <em>gharar</em>. Meanwhile, every transaction in the smart contract allows prohibited subject matters such as illegal drugs, weapons where as it is not allowed in Islamic contracts transactions. </p>\n\n<p> </p>
Digital currencies, despite its reputation of not being actual money by conventional definition, has found its way in the market. Although the initial issuer of digital currency like Bitcoin was not known and had no tie with central banks or any financial institutions, the digital currency is trending dynamically despite it being volatile. Many researchers found that its low correlation to stocks makes it a good complementary new financial instrument to be added to traditional assets such as stocks or gold. Owing to the reason, the objectives of this study are twofold; first, to observe the performance of the ‘new’ portfolio, and second, to examine the appropriate weight that should be allocated. Considering Bitcoins and conventional resources such as KLSE Index, Emas (gold), and oil price, this research used the return/risk and Sharpe ratio. It is found that a portfolio that combines Bitcoin, KLSE Index, Emas (gold), and oil performed well when the weight allocation for the digital currency is higher (in this context, 30 to 50 per cent). Also, by building an efficient frontier portfolio using the mean-CVaR approach, it is suggested that Bitcoins should be at a minimum of 3 per cent to ensure the portfolio is compensated by the appropriate return.
Ahmed Aliyu, Kamalrulnizam Abu Bakar, Gen Matsuda, Tasneem Darwish · 13 authors
Cryptocurrency has emerged as the most promising digital asset, which serves as a medium of exchange with distributed control and highly secured financial system. This lead to an increase in stakeholders’ interest in digital currency investment. The cryptocurrencies majorly involve two phases including Initial Coin Offering (ICO) and blockchain creation. These phases have been challenged with criticisms in terms of the Islamic shariah injunctions. These criticisms are based on two fundamental issues including whether cryptocurrency is backed by asset and has a regulatory authority or not. These issues are related to uncertainty, volatility and high speculation of the cryptocurrencies. Although, several cryptocurrencies claimed to have considered the shariah requirements in their proposed cryptocurrency ecosystems. However, a strict analysis of some of the existing cryptocurrencies reveals otherwise. Therefore, this paper presents a review of some shariah-compliant cryptocurrencies focusing on their volatility and speculation. The operations of cryptocurrencies need to follow the Islamic shariah requirements. The proposed review provides an insight regarding the acclaimed shariah-compliant cryptocurrencies to assess whether they comply with the shariah requirements or not.
Abstract The discussion of the sharia-compliancy of cryptocurrencies is shaped by the competing interests of legislators, the business and banking sector, private investors and, finally, religious scholars whose conclusions are diverse and often contradictory. This essay provides an overview of historical and modern Islamic conceptions of commodities and property, money, and contract of sale laws, and how they relate to cryptocurrencies such as Bitcoin. In doing so, I respond to the most frequent concerns of Muslim scholars: the volatility and speculative nature of cryptocurrencies, security issues and, most commonly, the claim that cryptocurrencies are not ḥalāl because they have no intrinsic value. Finally, I show the consequences of different lines of argument for the sharia compliancy of cryptocurrencies in a case study of four cryptocurrencies: Bitcoin, OneGramCoin, Steemit and Nexo.
Al-hussaini Abulfathi Ibrahim Saleh Al-hussaini, Adamu Abubakar Ibrahim, Mohamad Fauzan Noordin, Hazwani Mohd Mohadis
This paper presents a user study of “perception of the cryptocurrency-based transaction from the Islamic views”. The motivation lies with the fact that some users of cryptocurrency-based transaction raised concern on the nature of transactions with Bitcoin. Specifically, some argued that Bitcoin can be easily used for illegal purposes. Therefore, “Technological Acceptance Model” was adopted and quantitative research methodology was utilized, to formulate and test some hypothesis that will lead to an establishment of a model. Sample of 306 participants was used in the study. The result of the hypothesis testing indicates that “Behavioral Intention to Use Cryptocurrency from the Islamic perspective” is influenced directly by Shari’ah Compliance, Perceived Ease of Use, Emotionality, Perceived Usefulness, and Financial Concern. As evident from the analysis, Emotionality is influenced directly by Financial concern and Shari’ah Compliance. Whereas, Behavioral Intention is influenced indirectly by Financial Concern. The sample is general and does not specify a specific group of study. This study has contributed to understanding the Islamic issues behind the implementation of Cryptocurrency. This study adopted
Takaful insurance is increasing its consideration. Islamic insurance provides mutual aid and protection. However, the different model does not always make the business efficient. Several studies have shown the difficulty of Takaful companies in limiting their operating costs and having efficient borders. To reduce such operating costs and reach economies of scale, this paper assesses the adoption of Blockchain technology as a critical value for the Islamic insurance industry. Building upon a literature review and drawing on the SWOT framework, this paper outlines internal strengths and weaknesses as well as external opportunities and threats. Our analysis reveals that the Blockchain technology can help in the reduction of fraud, increase timeliness of actions for customers, allow for faster and more efficient management of claims and improve the risk management. Theoretical and practical implications are discussed
It is aimed in this study to develop a model of cryptocurrency which is applicable in Turkey and suitable for Islamic monetary and financial system, by presenting the condition of cryptocurrency, which has reached a significant size in the world of finance, in the system of Islamic finance.
Abstract The contention surrounding Bitcoin’s acceptability and usage has an unsettled premise in both conventional and Sharīʿah law, although digital and cryptocurrencies reflect a lasting reality. This research analyses this contention by examining the concept of currency and/or money and the underpinning trust reposed on its issuing authority against the notion that cryptocurrencies and fiat money differ only in form but share the same substance and purport. Qualitative methodology provides an analysis from conventional as well as Sharīʿah viewpoints to examine the extent cryptocurrencies can gain admittance in contemporary conventional and Islamic finance and economy. The methodology entails non-empirical secondary data sourced from libraries and online databases comprising journal articles, textbooks, newspapers and reports subjected to doctrinal content analysis. Research outcomes show division among stakeholders, including conventional and Sharīʿah scholars, regarding Bitcoin and cryptocurrencies. Further research is recommended inter alia on ways to adopt Shariah-compliant cryptocurrencies worldwide.
In an Islamic framework, the scholars need to verify all aspects of the emerging phenomenon known as cryptocurrency. It works as an agent for the prevailing forms of currencies and substitutes the need to carry it everywhere in its physical form which may become a security threat. The theologians have always disapproved what seem to them innovative, alien and working as an agent of change. However, whatever may be their stance about previous innovations, the society had to act otherwise due to the compelling needs that had to be fulfilled. The difference of opinion between the Muslim Scholars about the cryptocurrency has once again divided the Ummah about its acceptance, substituting other forms of currency like fiat currency, plastic currency etc. No doubt these forms of currency have heavily damaged the financial markets due to their speculative nature. It seems that Muslim Ummah is again standing on the cross roads where it is unable to decide its fate. This article presents the basic concept of cryptocurrency & virtual money, its pros & cons, its status regarding Pakistani & Islamic Perspective. At the end, various conclusions and suggestions have been drawn.
Islamic finance ecosystem could leverage from blockchain technology in order to improve business processes and streamline operations. The characteristics and conditions of blockchain are in alignment with the principles of Islamic Law as it creates the possibility of coordinating institutions' transactional activities within a strong mechanism of trust and transparency. Blockchain technology allows businesses to build decentralized models and opens new horizons for them to conduct transactions and make agreements. And one of the technologies that is proposing an alternative to the traditional model is smart contract. Smart contracts are closer to Islamic contracts with an undiluted focus on avoidance of any kind of uncertainty regarding settlement of the contracts. One would witness a sharp reduction in the element of gharar with contracting between unknown parties that meet on the internet, when Islamic contracts take the form of self-executing digital or smart contracts, with "electronically coded" terms of executions. The contractual terms will execute only if the pre-configured conditions are met. This will automate the entire contractual process for Islamic institutions. The Islamic contracts will now be easy to verify, immutable and secure, mitigating gharar in the form of operational risks arising from settlement, as well counterparty risks. The adoption of Smart contracts by the Islamic finance industry is the most natural thing to do, not just to gain a strong foothold in this technological revolution, but also to be able to fully comply with the Shari'ah in a transparent way. The Shari'ah laws can form the conditions of a smart contract. Honesty, transparency and trustworthiness are qualities that should make a financial transaction in the Islamic finance industry, and smart contracts are inherently all of these. In the era of faster globalization, risk management is of essential importance for banks. As credit risk being the most significant risk in Islamic Finance Institutions' (IFIs), we stressed our attention in this paper on it and as per our opinion we believe that the new ledger technology will add value for IFIs in terms of reducing it. Blockchain and particular Smart contracts would help reducing credit losses; provide more transparent and accurate credit ratings for capital allocation, which could lead to minimization of the required capital allocation for credit loss, as well better and cheaper administration and facilitation of collaterals. All the above will improve IFI's profitability and shareholders value. Not only the Islamic banks will abide fully with Shari'ah rules, but they could gain more international customers seen as the more reliable choice. The purpose of the study consists of analyzing the role of blockchain and smart contracts as a tool for risk management. We used AlInma bank as a case study to show the impact of using new FINTECH in Islamic finance. The main findings of the paper show that using blockchain and smart contracts as a tool of risk management reduces costs for IFIs considerably. The paper is organized as follows: section one will present the introduction and literature review. Section two describes Blockchain technology and Smart contracts and finally we focus on how risk management could benefit from these technologies in Islamic financing. The rest of the sections will present and discuss the use of blockchain in risk management.
Ahmad Shauqi Bin Haji Mohamad Zubir, Nur Aishah, Azwadi Ali, Safiek Mokhlis · 5 authors
As the society is becoming more digitised day by day, we are being constantly introduced with advanced smart technologies that transpire changes in our lives. The blockchain technology and cryptocurrencies came in at the appropriate time which has provided pathways and security for many vulnerable internet-connected devices as the technology uses distributed verification of transactions. Due to their unique features, cryptocurrencies carry value on their own and now can be used for trading and transactions. In many established markets, transactions and trading in cryptocurencies have been growing and many have seen them as potential assets and investment option. Nevertheless, in many other countries, cryptocurrencies are not very popular and due to lack of awareness, many of their citizens are yet to own any cryptocurrencies. This study assessed the awareness of cryptocurrencies among selected Malaysian public and tested certain determinants and found almost three quarter of the respondents were aware of them but none is owning even one digital currency. Among the determinants, age group, ethnicity and occupation status were found to have influenced respondents’ awareness about cryptocurrencies. If it is an interest of the government to promote the use of cryptocurrencies, necessary exposure campaigns as well as guarantee of control and security should be made a priority.