Muhammad Izzul Syahmi Zulkepli, Abdul Muneem, Mohd Shahid Mohd Noh, Mohammad Taqiuddin Mohamad · 5 authors
Smart contracts offer Islamic finance a new mechanism for executing transactions with greater transparency, efficiency and reduced Sharia non-compliance risk, yet their distinct technical features introduce Sharia challenges scholarly exploration. This paper aims to study the implementation of smart contracts from the Sharia Scholars’ perspective and to analyze its operational challenges as well as Sharia-related issues that arise from integration in the realm of Islamic finance. Using a qualitative approach, data was collected from credible sources such as books, journals, and relevant websites, with strict inclusion criteria. The analysis employed inductive reasoning and an explanatory research method to explore the application and issues surrounding smart contracts. The study finds that smart contracts hold great potential and are generally Sharia-compliant. However, technical aspects, such as contract terms, coding, execution, and protocol consensus require further research. It also stresses the importance of having a Sharia committee or advisor to ensure compliance in products and operations.
Awqaf (Islamic endowments) historically functioned as decentralized institutions financing education, healthcare, infrastructure, and social welfare across the Muslim world. Grounded in the principles of perpetuity and inalienability, they transformed private wealth into sustainable public goods, as highlighted by Monzer Kahf and Murat Çizakça, while also facing institutional rigidity concerns raised by Timur Kuran.This paper examines the evolution of Awqaf from classical asset-based models to innovative structures such as cash waqf, waqf sukuk, corporate waqf, and intellectual property waqf. It proposes the Integrated Digital Awqaf Ecosystem (IDAE) Framework to explain how digitalization enhances governance, transparency, financial integration, and socio-economic impact. The study concludes that digitally integrated Awqaf can become strategic pillars of sustainable development in contemporary Muslim economies.
This chapter explores the transformative role of fintech, blockchain, and cryptocurrency in advancing ethical finance, with a focus on Islamic financial principles. It examines how technologies like distributed ledger technology and smart contracts can enhance transparency, efficiency, and financial inclusion while adhering to sharīʿah prohibitions against ribā, gharar, and maysir. The discussion highlights key fintech applications, including crowdfunding, digital waqf, and precious metal-backed cryptocurrencies, which align with Islamic finance’s emphasis on asset-backed and risk-sharing models. Case studies from Malaysia, Saudi Arabia, Indonesia, and other Organization of Islamic Cooperation countries illustrate the growth of Islamic fintech ecosystems. The chapter also addresses regulatory challenges and the need for robust frameworks to ensure ethical compliance and systemic stability. By integrating fintech with maqāṣid al-sharīʿah (higher purposes of Islamic law), Islamic finance can promote social justice, sustainability, and equitable resource distribution, offering a viable alternative to conventional financial systems.
Muhammad Irwan Ariffin, Noor Hazrin Hany Mohamad Hanif
The transition to decentralized renewable energy systems has gained significant attention, particularly through peer-to-peer (P2P) energy trading models that enable direct energy transactions between participants. While these systems offer technological and economic benefits, challenges persist in terms of social equity, technological accessibility, and ethical considerations. This chapter adopts a qualitative methodology based on a comprehensive literature review and meta-analysis and uniquely integrates Islamic finance principles, such as fairness, transparency, and risk-sharing, into the evaluation of P2P energy trading models. Through a review of pricing determination techniques and Islamic financial frameworks, a conceptual model is proposed to align decentralized energy markets with ethical financial practices. The findings offer policy insights for regulators and stakeholders, particularly in Muslim-majority regions, to develop inclusive and socially responsible energy trading systems that balance economic growth, environmental sustainability, and ethical values.
Minela Nuhić-Mešković, M. Kabir Hassan, Admir Mešković
Purpose This study aims to systematically synthesize academic literature on Islamic FinTech published prior to 2025 to identify prevailing themes, regional and methodological trends and unresolved research gaps. Design/methodology/approach A systematic literature review (SLR) was conducted following the PRISMA 2020 protocol to ensure transparency and replicability. A total of 162 peer-reviewed journal articles were identified from Scopus and Web of Science databases using defined keywords. Bibliometric mapping (via VOSviewer), qualitative coding and descriptive statistics were used to identify major themes, methodological patterns and research gaps. Findings The review reveals a rapid increase in Islamic FinTech scholarship, particularly after 2020, with Southeast Asia dominating the output. Five major thematic clusters emerge: digital transformation, technology adoption, Shariah compliance, decentralized finance and Islamic social finance. Research limitations/implications Findings point to the importance of more diversified methodologies, cross-regional studies, harmonized Shariah standards and inclusive digital financial solutions. Practical implications The findings suggest that effective adoption of FinTech can enhance cost efficiency, operational scalability and product diversification for Islamic financial institutions. Social implications Islamic FinTech can widen social inclusion, improve transparency and support social goals. To unlock that potential, the study needs shared Shariah and regulatory standards, user-centred design and pilot projects that measure outcomes. Originality/value To the best of the authors’ knowledge, this is the first comprehensive SLR of Islamic FinTech integrating Scopus and Web of Science sources within the PRISMA 2020 framework, providing a consolidated foundation for future empirical, theoretical and policy research.
Materi ini membahas kerangka penilaian kehalalan aset kripto menurut pendekatan Muhammadiyah dengan menekankan pemisahan antara teknologi blockchain sebagai infrastruktur dan aset kripto sebagai objek transaksi. Kripto diposisikan sebagai harta (māl mutaqawwām) sehingga hukum asal pemanfaatannya adalah mubah muqayyad, yaitu boleh tetapi terikat syarat-syarat syariah. Kehalalan transaksi kripto ditopang oleh dua pilar utama, yakni keabsahan objek dan kehalalan mekanisme transaksi. Pada sisi objek, aset dinilai layak apabila memiliki fungsi nyata, seperti penyimpanan nilai, utilitas, tata kelola, atau dukungan terhadap infrastruktur teknologi; sebaliknya, aset yang terkait ekosistem haram, skema penipuan, perjudian, atau token tanpa utilitas yang murni spekulatif dinilai tidak memenuhi syarat. Pada sisi mekanisme, transaksi spot atas aset yang halal pada dasarnya dibolehkan, sedangkan futures, margin, leverage, short selling, pump-and-dump, dan crypto lending berbasis imbal hasil tetap dipandang bermasalah karena mengandung unsur riba, gharar, maysir, atau penjualan atas barang yang tidak dimiliki. Kajian ini juga menunjukkan bahwa beberapa praktik Web3 memerlukan pembedaan hukum yang lebih rinci, seperti liquidity providing, staking pools, native validator staking, dan airdrop, yang statusnya bergantung pada struktur akad, sumber imbalan, serta substansi aktivitas yang difasilitasi. Pada akhirnya, materi ini menegaskan pentingnya literasi, kehati-hatian, dan kepatuhan terhadap hukum negara dalam aktivitas kripto, termasuk pembatasan penggunaan kripto sebagai alat pembayaran. Kata kunci: aset kripto, hukum Islam, Muhammadiyah, Web3, DeFi, staking, transaksi syariah
Over the past decade, the explosion of digital assets, including cryptocurrencies, non-fungible tokens (NFTs), and cloud-based accounts, has introduced complex legal questions that conventional inheritance regimes struggle to address. In Muslim‐majority jurisdictions and among Muslim communities worldwide, these questions intersect with the requirements of Islamic personal law, particularly the farā’iḍ (obligatory heirs’ shares) and waṣiyya (testamentary bequests). This study undertakes original empirical and doctrinal research to chart a path toward a unified fiqh‑grounded framework for digital asset succession. By combining doctrinal analysis of classical juristic sources, contemporary fatwas, and statutory developments with semi‑structured interviews among scholars, estate planners, and digital asset owners across Malaysia, Indonesia, Pakistan, and the United Kingdom, the research shows that digital assets are increasingly recognized as mal mutaqawwim (valuable property) but lack standardized protocols for identification, valuation, and transfer. The study reveals that differences in platform terms of service and cross‑border jurisdiction complicate heirs’ access to private keys and cloud accounts, exacerbating existing gender and socio‑economic disparities. It proposes a model of “custodial key trusts” and e‑wills that integrate digital asset inventories with farā’iḍ distributions, allowing compliance with both shariah and civil laws. The paper argues that without coordinated legal reforms and educational initiatives, vast wealth stored in digital forms risks being lost or misappropriated, undermining the objectives of ḥifẓ al‑māl (preservation of wealth) and social justice.
This study aims to examine the development and structure of global research on Sharia finance through a bibliometric analysis of publications indexed in the Scopus database from 2010 to 2024. Using bibliometric techniques and visualization tools such as VOSviewer, this study analyzes publication trends, collaboration networks among authors, institutions, and countries, as well as the thematic evolution of research topics in the field of Islamic finance. The results indicate that research on Sharia finance has grown significantly during the observed period, reflecting the increasing global importance of Islamic financial systems. The collaboration analysis shows that several key authors and institutions play central roles in connecting different research groups, while countries such as Indonesia, Malaysia, Saudi Arabia, the United Kingdom, and the United States emerge as important contributors to the global research network. Keyword co-occurrence analysis reveals that dominant themes include Islamic banking, Sharia compliance, financial institutions, and Islamic law. At the same time, emerging topics such as financial technology (fintech), blockchain, decentralized finance, and financial inclusion indicate a shift toward digital transformation and innovation in Islamic financial services. Furthermore, themes related to sustainable development, ESG, and waqf highlight the growing integration of Islamic finance with broader sustainability and ethical finance agendas. This study provides a comprehensive overview of the intellectual structure, collaboration patterns, and emerging research trends in Sharia finance, offering valuable insights for future academic research and policy development in the global Islamic financial industry.
This paper analyzes the opportunities and obstacles to introducing smart contracts into the Iraqi legal framework, focusing on the doctrinal and practical aspects. Smart contracts are self-executing transactions based on blockchain networks, lacking the involvement of intermediaries, and contest the concepts of consent, lawful subject matter, and cause of action in traditional civil-law regimes, as embodied in the Iraqi Civil Contracts Law No. 40 of 1951. Using a descriptive-analytical and comparative research approach, the study assesses Iraqi laws, as well as the experience of other countries, specifically the United States, the European Union, and the United Arab Emirates, in relation to legal recognition, assigning liability, consumer protection, and automated implementation. The conclusions show that the current legal system in Iraq lacks express clauses addressing smart contracts, leading to confusion about the identification of parties, their binding relationships, and penalties for programming errors. A comparative analysis shows that effective regulatory models are characterized by clear legal definitions, judicial capacity-building, regulatory sandboxes, and consumer rights protection. The analysis also draws on Islamic normative concepts (maqāṣid al-sharīʿah), such as ḥifẓ al-māl (wealth preservation), al-ʿadl (justice), and darʾ al-mafsid (hitting back), to support ethical governance, algorithmic responsibility, and risk avoidance. On this basis, the study suggests a balanced legislative framework for Iraq that would uphold classical principles of contract keeping and empower digital innovation by introducing statutory treatment of smart contracts, well-structured liability rules, consumer protection, and institutional reforms. Such a framework promotes the responsible adoption of automated contracts in sectors including e-commerce and financial services, enhances legal predictability, aligns domestic law with cross-border digital practices, and ensures normative legitimacy within an Islamic and international legal context.
Fanidio Muhammad Ariq Sugiarto, Nur Chanifah, Siti Rohmah
The rapid development of blockchain technology has introduced smart contracts as automated digital agreements widely used in the Decentralized Finance (DeFi) ecosystem. These contracts operate without intermediaries and execute transactions based on algorithmic conditions, creating new legal and sharia implications. This study aims to analyze the validity of smart contracts as akad (contracts) within the framework of fiqh muamalah and to formulate regulatory needs based on maqāṣid al-sharī‘ah and positive law. This research uses normative juridical methods with statutory, conceptual, and sharia approaches by examining legal doctrines, regulations, and Islamic jurisprudence principles. The results show that smart contracts can qualify as valid akad if pillars and conditions of contract are fulfilled, including parties, consent, object, and lawful purpose, although digital consent and automated execution require interpretative expansion. From the maqāṣid perspective, smart contracts potentially support protection of wealth (ḥifẓ al-māl), transparency, and efficiency, but also pose gharar and risk if coding errors and regulatory gaps exist. Therefore, integrative regulation and sharia compliance standards are necessary to ensure legal certainty and maslahah in DeFi transactions.
Penelitian ini mendalami peran Non-Fungible Token (NFT) sebagai harta benda wakaf dalam konteks hukum positif Indonesia dan perspektif Maqāṣid Syarī‘ah. Latar belakang kajian ini adalah maraknya inovasi digital di era teknologi informasi yang memunculkan instrumen filantropi baru, termasuk NFT yang bersifat unik dan mempunyai nilai ekonomi. Karakteristik NFT selaras dengan prinsip wakaf yang menekankan keberlanjutan manfaat bagi kepentingan umum. Namun belum ada aturan hukum yang implisit mengatur NFT sebagai objek wakaf, sehingga memunculkan kekosongan norma dan keraguan mengenai keabsahan inovasi ini. Metode penelitian yang digunakan adalah penelitian normatif dengan pendekatan perundang-undangan, konseptual, dan perbandingan. Pendekatan perundang-undangan menelaah regulasi seperti Undang-Undang tentang Wakaf dan peraturan pelaksanaannya, pendekatan konseptual memaknai istilah dan prinsip hukum wakaf sedangkan pendekatan perbandingan membandingkan praktik dan pandangan fikih dari berbagai wilayah hukum yang berbeda. Kerangka teoretis mencakup teori kepastian hukum Gustav Radbruch, yang menegaskan pentingnya kepastian dan keadilan hukum dalam menghadapi fenomena baru, serta sistem Maqāṣid Syarī‘ah dari Jasser Auda yang menitikberatkan pada pencapaian kemaslahatan umum (maslahah). Temuan utama penelitian menunjukkan bahwa dalam hukum positif Indonesia kedudukan NFT sebagai harta wakaf masih berada dalam kekosongan norma, karena Undang-Undang tentang Wakaf belum memuat aset digital seperti NFT. Meski demikian, berdasarkan perspektif Maqāṣid Syarī‘ah NFT memiliki potensi memenuhi kriteria harta wakaf. Secara fungsional, NFT bersifat kekal secara digital, mempunyai nilai guna ekonomi jangka panjang, dan mampu menghasilkan manfaat publik berkelanjutan serta memenuhi prinsip maslahah umum dalam Maqāṣid Syarī‘ah. Hasil Penelitian ini menunjukkan bahwa NFT berpotensi sah sebagai objek wakaf sepanjang memenuhi prinsip legalitas administratif serta kemaslahatan syariah. Dengan memastikan prosedur tata cara wakaf sesuai ketentuan hukum positif (legalitas formal) dan menjaga tujuan manfaat bagi publik (kemaslahatan), NFT dapat menjadi inovasi wakaf digital yang sesuai dengan prinsip-prinsip Islam kontemporer. Studi ini menegaskan perlunya aturan resmi dan kepastian hukum untuk mewujudkan potensi NFT sebagai harta wakaf yang amanah dan berdaya guna. Kata Kunci: Non-Fungible Token (NFT), Wakaf Digital, Hukum Positif Indonesia, Maqāṣid Syarī‘ah, Kepastian Hukum.
Ahmad Khalifah Zamrud, Usman Jafar, Abdul Wahid Haddade
IntroductionThe rapid expansion of cryptocurrency has generated significant debate within Islamic economic discourse. Bitcoin, as the first decentralized digital currency, offers technological advantages such as transparency, efficiency, and global accessibility. However, it also raises concerns regarding price volatility, speculative trading behavior, and the absence of intrinsic value. These issues have prompted Islamic scholars and regulatory institutions to evaluate cryptocurrency from the perspective of Islamic law and financial ethics. In Indonesia, the Indonesian Ulema Council issued a religious ruling declaring Bitcoin impermissible due to elements of uncertainty, speculation, and potential economic harm. This ruling has stimulated ongoing discussion about the compatibility of cryptocurrency innovation with Islamic economic principles.ObjectivesThis study aims to critically analyze the religious ruling on Bitcoin issued by the Indonesian Ulema Council by examining its legal reasoning, its relationship with Islamic economic principles, and its implications for the governance of digital financial innovation. The research also seeks to explore whether cryptocurrency can be accommodated within an Islamic economic framework under certain regulatory and ethical conditions.MethodThe study employs a qualitative research design using a transdisciplinary analytical approach that integrates perspectives from Islamic jurisprudence, Islamic economics, financial regulation, and digital financial technology. Data were collected through documentation of religious rulings, regulatory policies, and scholarly literature related to cryptocurrency and Islamic finance. The data were analyzed through thematic and comparative analysis to identify the legal reasoning underlying the prohibition of Bitcoin and to evaluate alternative scholarly interpretations regarding the status of digital assets in Islamic economics.ResultsThe findings indicate that the prohibition of Bitcoin is primarily based on concerns about excessive uncertainty, speculative trading behavior, and potential economic harm associated with cryptocurrency markets. Nevertheless, the analysis also reveals that cryptocurrency may be considered permissible when these elements are mitigated through transparent governance, regulatory oversight, and the development of asset-backed digital financial instruments.ImplicationsThe study highlights the importance of developing regulatory and institutional frameworks that reconcile financial innovation with Islamic ethical principles. Such frameworks can provide clearer guidance for Muslim investors while supporting responsible digital financial development.Originality or NoveltyThis research contributes to the growing literature on cryptocurrency in Islamic economics by offering a critical analysis of religious rulings within the broader context of digital financial transformation and regulatory governance.
Virtual currencies are banned by conventional banks of various countries, on the basis of their anonymity and because they employ a distributed ledger with zero supervision by a central authority. Digital currencies are, in fact, based upon an open distributed ledger system in which a public key (user's address and current balance) is not hidden from other users of block chain system. Additionally, a distributed ledger synchronises the data of its transactional records on every user location, hence no central system can be hacked (contrary to conventional banking systems). Islam provides the idea of social justice, and a currency that is backed with a reference material of good value, since our currency depends on government backing (can lose all of its value any day, if the government choose to take such action). Additionally, Islam prohibits any “Gharar” which means uncertainty, transactions dependent upon future outcomes, high-risk involvement and “Maysir” (gambling- game of chance). Digital currencies exhibit both “Gharar” and “Maysir”, but can be deemed fit under the Islamic principles if they use gold as a reference material. In past, Islamic instances show the use of 4.25 gm of gold as a dinar and 3 gm of silver as a dirham. A digital currency of OneGram coin is a perfect recommendation in this case, since each Onegram coin is backed with Onegram of gold and it donates 2.5% to charity from every 1% generated through each transaction. It is recommended that Islamic banks can provide some supervision to a currency like Onegram coin, and distributed ledgers can be stored in various Islamic banks and also at different locations of users all around the world, hence increasingthe security of viable banking transactions through cryptographic encryptions.
Purpose — This paper investigates whether perpetual futures can satisfy Islamic prohibitions on riba (interest), gharar (uncertainty), and maysir (speculation) — a question unaddressed by prior literature. Design/methodology/approach — The study develops a four-category taxonomy of perpetual futures by funding-formula structure, collects 39,406 unique funding-rate intervals across four platforms over 365 days (February 2025 – February 2026), and analyses a cross-platform comparison — with a placebo design — between interest-bearing and interest-free DEX protocols. Shariah analysis applies El-Gamal's riba conditions, Kamali's standardisation criterion, and Salamon's maysir test. Findings — The interest parameter in CEX funding formulas is mathematically unnecessary. dYdX v4 operates with I = 0 and produces a funding distribution distinct from CEX platforms (Cohen's d = 0.782 at native cadence, 0.703 cadence-matched; Kolmogorov-Smirnov D = 0.506). Hyperliquid — a DEX using the CEX formula — clusters with CEX. Formula structure rather than exchange architecture governs the riba dimension of the Shariah classification. Originality/value — The first empirically validated framework demonstrating that the riba component of perpetual futures funding is structurally removable, correcting an error of extrapolation in Islamic finance scholarship that treated a single CEX implementation as representative of the entire instrument class. Ownership (qabdh) and delivery-intent are scoped as open questions for cash-settled synthetic perpetuals. Research limitations/implications — The empirical sample covers a single 365-day period; extension to additional time windows would strengthen external validity. Practical implications — The taxonomy provides a screening tool for Shariah boards, fund managers, and exchange designers evaluating Shariah-compliant perpetual futures instruments.
This undergraduate capstone thesis examines the challenges and opportunities associated with the regulation and adoption of Decentralized Finance (DeFi) in the United Arab Emirates. Drawing on a qualitative analysis of regulatory documents, academic literature, and 13 semi-structured interviews with DeFi practitioners—including smart contract developers, compliance/AML experts, product managers, and blockchain specialists—the study investigates how the UAE’s multi-jurisdictional framework (VARA, ADGM, CBUAE, and SCA) shapes institutional confidence and market participation. Key findings reveal structural challenges stemming from DeFi’s decentralized, borderless, and pseudonymous nature, such as the absence of a central “off switch,” enforcement difficulties with KYC/AML and the FATF Travel Rule, consumer risks from smart-contract vulnerabilities and low financial literacy, and regulatory fragmentation across emirates. At the same time, experts identify substantial opportunities in cheaper cross-border remittances, real-world asset tokenization, SME financing through automated lending pools, and the UAE’s positioning as a global fintech hub. The research supports the thesis that greater regulatory clarity and enforcement coherence causally influence institutional confidence and the trajectory of DeFi adoption. It concludes with actionable policy recommendations—including targeted regulatory sandboxes, RegTech investment, on-chain accountability mechanisms, innovation-linked incentives, and mutual recognition agreements—to help the UAE balance innovation with consumer protection and financial stability.
The rapid expansion of decentralised finance (DeFi) has elevated digital assets, particularly Non-Fungible Tokens (NFTs), to a prominent position within contemporary financial markets. NFTs are blockchain-based digital tokens enabled by smart contracts that facilitate verifiable ownership and authentication in decentralised environments. Despite growing international efforts to regulate NFT markets, clear legal frameworks—especially those addressing Shariah-compliant NFTs—remain underdeveloped. In Malaysia, the Islamic Financial Services Act 2013 (IFSA) and the Securities Commission Malaysia’s Digital Assets Guidelines provide only limited guidance on the classification, ownership, and enforceability of NFT-based financial products. This article examines the development of NFTs, analyses the existing Malaysian legal framework, and evaluates the readiness of Malaysia’s regulatory architecture to accommodate Shariah-compliant NFTs. Adopting a doctrinal methodology supported by case analysis, the study explores the applicability of current laws to NFT transactions and undertakes a comparative assessment of regulatory developments in the United Arab Emirates. The absence of explicit regulatory provisions raises significant Shariah compliance concerns, particularly in relation to gharar (uncertainty), riba (usury), and the recognition of māl (legitimate ownership), which may impede Malaysia’s aspiration to emerge as an Islamic DeFi hub. This study finds that Malaysia’s existing legal framework lacks specific Shariah compliance mechanisms for the legal recognition and governance of NFTs. Accordingly, targeted regulatory reforms are necessary to address the legal and Shariah complexities associated with NFTs and to facilitate responsible digital innovation within Malaysia’s Islamic DeFi ecosystem.
Muhammad Abduh Tuasikal, Jaih Mubarak, Ibdalsyah, Yulizar Djamaluddin Sanrego
The rapid growth of cryptocurrency investors in Indonesia has sparked debates about its legal status within Islamic jurisprudence. A key focus is the extreme price volatility of cryptocurrencies and whether this should be classified as gharar (excessive uncertainty) or simply as market risk. This study utilizes a normative-legal and doctrinal approach to differentiate between volatility, an inherent characteristic of modern financial instruments, and gharar, a prohibited element in Islamic contracts. The primary data for this research is sourced from classical fiqh texts and contemporary fatwas, while secondary data includes regulations and indexed academic studies on financial volatility. The findings indicate that although cryptocurrencies display higher volatility compared to stocks and gold, not all fluctuations can be classified as gharar fāḥish (excessive uncertainty). Instead, volatility should be viewed as market risk (al-ghurm), which is measurable, manageable, and tolerable under Islamic law, provided that transparency and risk-sharing mechanisms are in place. The study concludes that cryptocurrencies can be considered lawful property under Islamic law when they are free from ribā (usury), maysir (gambling), and excessive gharar, thereby providing a solid foundation for issuing fatwas and designing regulations.
The advancement of blockchain technology has introduced new digital economic instruments, notably Non-Fungible Tokens (NFTs), which function not only as representations of digital asset ownership but also as investment vehicles with highly volatile values. This development has sparked debates within Islamic law, particularly regarding the presence of gharar (excessive uncertainty) and maisir (speculative gambling) in NFT investment practices. This study examines the legal status of NFT investment from the perspective of ḥadīth-based muʿāmalah and analyzes the extent to which gharar and maisir are inherent in its transactional mechanisms. Employing a qualitative library research approach, this study uses descriptive-analytical methods to examine Prophetic ḥadīths prohibiting gharar and maisir, and contextualizes them within the technical characteristics and transaction structures of NFTs. Data sources include classical ḥadīth collections, ḥadīth commentaries, fiqh al-muʿāmalah literature, and relevant contemporary scholarly works. The findings indicate that NFTs, as digital assets, possess definable objects, ownership clarity, and verifiable delivery through blockchain technology, and therefore do not inherently constitute gharar. However, the use of cryptocurrency, extreme price volatility, and short-term speculative behavior may introduce elements of gharar and maisir if not accompanied by clear valuation, utility, and investment objectives. Consequently, the permissibility of NFT investment cannot be generalized but must be assessed contextually to uphold justice and the protection of wealth (ḥifẓ al-māl).
The global expansion of Bitcoin and cryptocurrencies brings unanswered questions of the Islamic finance that are legal in nature. The existing research is divided into two camps, namely, total prohibition, or conditional acceptance. It is a thematic analysis of 32 public fatwas (2014-2024) of 12 Islamic jurisdictions in the first systematic analysis. The application of cryptocurrencies and their Shariah acceptability are analyzed. This paper applies the six-stage model offered by Braun and Clarke and it establishes five key jurist themes. The former theme is the ambiguity of the issue of whether cryptocurrencies are to be treated as mal (property) or thamaniyyah (money). The second theme talks about gharar, i.e., excessive uncertainty that is caused by volatility, lack of transparency and regulatory instability. The third theme concerns speculation by trading which is similar to maysir (gambling). The fourth theme is about mafsadah, which is harm to society and includes illicit use, environmental costs and inequality. Lastly, the fifth theme is on interpretations and deviations which form conditional permissibility in the presence of regulation and transparency, which minimises the risks of jurisprudence. The findings indicate that juristic disagreement is not an issue of inconsistency but the use of the various kinds of reasoning on novel financial technologies. The study paves the way in the study of Islamic-finance, by transforming the disjointed textual load of fatwa into a juristic map, which articulates the reasons behind the variance of rulings, as opposed to how they vary. This paper can be used by Shariah boards, regulators, and developers of digital assets to take action on implementing maqasid al-Shari, in the regulation of digital assets.
Anisa Nasib, Siti Nadiah Mohd Salim, Nurul Ain Othman
The incorporation of tawarruq mechanisms within digital ar-rahnu systems signifies a pivotal transformation in the architecture of Shariah-compliant financial services. This mini-review critically investigates the convergence between tawarruq-based financing frameworks and emerging digital technologies namely artificial intelligence (AI), mobile applications, and blockchain infrastructure through the lenses of operational potential, regulatory complexity and Shariah alignment. Technological advancements such as ChatGPT and other AI-driven models are evaluated for their capacity to streamline operational efficiency, facilitate automated Shariah compliance screening and enhance consumer interaction. However, the implementation of these tools also introduces critical concerns related to citation reliability, jurisprudential depth and adherence to Islamic legal ethics. Major challenges encompass disparities in digital literacy, the commodification of personal data under surveillance capitalism, and threats to digital sovereignty. On the contrary, digital innovations like decentralized autonomous organizations (DAOs) and inclusive blockchain-based financial platforms offer promising avenues for expanding access to Islamic financial services. The review further assesses the efficacy of AI-generated content in Islamic finance, recognizing its value in preliminary knowledge dissemination while highlighting its deficiencies in scholarly rigor. This paper contributes to the evolving discourse on digital Islamic finance by emphasizing the necessity of rigorous Shariah governance to ensure ethical and effective integration of technology in tawarruq-driven financial instruments.
The development of blockchain technology has brought significant innovation to the financial sector, including the management of Shariah-compliant finance, by enhancing transparency, security, and efficiency of financial transactions in accordance with Shariah principles. This technology utilizes distributed ledger technology (DLT) and smart contracts to ensure authenticity and fairness in transactions, thereby strengthening trust and accountability within the Shariah financial system. This study aims to analyze the effectiveness of blockchain implementation in Shariah finance and identify various challenges faced in the digital era, such as immature regulations, limited digital infrastructure, and low levels of technological literacy among industry players. The research method includes a literature review of relevant journals and reports, as well as case studies of blockchain implementation in Shariah financial institutions. The findings indicate that blockchain plays a crucial role in increasing trust and transparency, but its success heavily depends on the synergy among regulators, Shariah financial institutions, and other stakeholders to overcome these obstacles. These results emphasize the importance of collaborative and innovative strategies to support the sustainable growth of the Shariah financial system in the digital age.