Mila Dwi Rahmatya, Mohd Syahiran Abdul Latif, Mohd Hapiz Mahaiyadin, Mohd Sirajuddin Siswadi Putera Mohamed Shith
Decentralized Exchanges (DEX) powered by immutable and automated smart contracts have revolutionized cryptocurrency trading by eliminating intermediaries. However, the alignment of their mechanisms with Islamic principles of sale and purchase remains unclear. This study conducted a qualitative analysis to assess the sharia compliance of DEXs. This research examines the conformity of DEX trading mechanisms with sharia principles by utilizing content and normative analysis of classical and contemporary Islamic finance literature alongside DEX-related articles, white papers, and industry reports. The findings reveal critical areas of non-compliance, particularly concerning contracting parties ('aqīd) and subject matter (mabī'). DEXs lack mechanisms to verify the legal capacity of transacting parties, potentially enabling involvement from individuals deemed incompetent under sharia. Cryptocurrencies as a medium of exchange also raise concerns because of their ambiguous nature as commodities or currencies, potentially leading to gharar (uncertainty) and ḍarar (harm). While certain aspects, such as the clarity of offer and acceptance (ijāb wa qabūl) through smart contracts and specific traded assets, such as certain tokens and NFTs, might align with sharia, the overall risks associated with speculation and inherent uncertainties necessitate caution. This study recommends that Muslims approach DEXs with caution until clear guidelines and sharia-compliant platforms are established. Furthermore, increased scrutiny from Islamic scholars and regulatory bodies is crucial for ensuring this rapidly evolving technology's ethical and compliant development. Abstrak Decentralized Exchanges (DEX) yang didukung oleh smart contracts telah mengubah perdagangan mata uang kripto dengan menghilangkan peran perantara. Namun, kesesuaian mekanisme DEX dengan prinsip jual beli dalam Islam masih menjadi perdebatan. Studi ini melakukan analisis kualitatif untuk menilai kepatuhan DEX terhadap syariah. Metode analisis konten dan normatif digunakan berdasarkan literatur keuangan Islam klasik dan kontemporer, serta artikel, white papers, dan laporan industri terkait DEX. Hasil penelitian menunjukkan beberapa aspek kritis yang tidak sesuai dengan syariah, terutama terkait pihak yang berkontrak ('aqīd) dan objek akad (mabī'). DEX tidak memiliki mekanisme untuk memverifikasi kapasitas hukum pihak yang bertransaksi, sehingga berpotensi melibatkan individu yang tidak kompeten menurut syariah. Selain itu, status mata uang kripto sebagai alat tukar menimbulkan ketidakpastian terkait posisinya sebagai komoditas atau mata uang, yang dapat mengakibatkan gharar (ketidakpastian) dan ḍarar (kerugian). Meski beberapa aspek seperti penawaran dan penerimaan (ijāb wa qabūl) melalui smart contracts sesuai syariah, risiko spekulasi tetap tinggi. Oleh karena itu, studi ini merekomendasikan kehati-hatian bagi umat Muslim dalam menggunakan DEX hingga panduan syariah yang lebih jelas tersedia, serta pengawasan ulama dan regulator yang lebih ketat diperlukan.
Mahad Abdiwali Mohamed, Ahmed Nur Dirie, Abdiaziz Bashir Mohamud, Mohamed Abdisamad Farah · 5 authors
This paper conducts a bibliometric review of the scholarly sources of the intersection of cryptocurrencies, crowdfunding, and Islamic finance, in order to see the trends, contributions, and new directions to make Shariah-compliant FinTech and sustainability. The past decade witnessed the revolution of digital technologies such as blockchain, IoT, and AI in the banking and industries. Cryptocurrencies make the peer-to-peer transactions possible and crowdfunding helps businesses to raise funds. The concept of blockchain and central bank digital currency (CBDCs) will support sustainable finance by improving green bonds and reducing emissions. Crowdfunding in Islamic finance complies with the Shariah, as offered under risk-sharing schemes like the Mudarabah and Qard Hasan; however, the integration of the cryptocurrency as an additional risk management tool faces regulatory and compliance difficulties. Despite recent growing academic attention since 2017, most prominently dropped by Malaysia and Indonesia, there exist gaps in understanding their synergistic role towards financial inclusion and strong sustainability (SS). Blockchain relieves gharar and automates contracts that are Shariah compliant; however, there are still regulatory disagreements. Planned performing and ethics theories, the Theory of Planned Behaviors and Maqasid al-Shariah educate about the open and fair influences in adoption and assessment procedures. Through the VOSviewer and Scopus data (20142025), 158 articles reveal a maximum of publications of 2024, a high of 2020 citations, and the two countries, Malaysia (60 documents) and Indonesia as the most significant ones, with such publications as the Journal of Islamic Accounting and Business Research. Recommendations on transparent, sustainable financial ecosystems involve better blockchain-based crowdfunding, Shariah-ajority digital currencies, and better cryptocurrency determinations.
The application of blockchain-based smart contracts within Islamic finance presents both opportunities and significant governance challenges. While these technologies promise enhanced efficiency, automation, and immutability, their integration into Shariah-compliant financial instruments, such as Murabaha, Ijarah, and Sukuk, raises critical concerns regarding auditability, interpretive flexibility, and adherence to foundational Islamic legal and ethical principles. This study examines the tensions between automation and religious oversight by investigating how smart contracts intersect with Shariah governance and IT audit frameworks in Islamic financial institutions.Utilizing a qualitative multiple-case study approach, the research draws on semi-structured interviews with Shariah scholars, auditors, compliance officers, and blockchain developers across Islamic fintech ecosystems in Malaysia, Bahrain, Kingdom of Saudi Arabia and the United Arab Emirates. Thematic analysis, supported by document review, reveals systemic challenges in embedding ethical discretion and human oversight into immutable contractual code. Analytical framing is guided by established IT assurance frameworks (e.g., COBIT, ISO 27001) and Shariah governance standards issued by AAOIFI and IFSB.Findings highlight the emergence of "risk zones" where algorithmic rigidity, audit traceability limitations, and ethical ambiguity converge, potentially undermining religious compliance. In response, the study proposes a conceptual governance model that integrates technological assurance mechanisms with structured Shariah supervisory engagement. The findings contribute to the discourse on responsible FinTech governance in Islamic finance and offer practical implications for policymakers, auditors, and technology developers navigating the intersection of blockchain innovation and faith-based financial regulation.
This study examines the implementation of blockchain-based smart contracts in Islamic finance, focusing on the opportunities and challenges arising from their integration into contemporary financial systems. The scope of the research includes the technological characteristics of smart contracts, their compatibility with Sharia principles, and their potential applications across Islamic financial products such as sukuk, mudarabah, and murabahah. The main objective of this study is to analyze how smart contracts can enhance transparency, trust, and efficiency while identifying the legal, technical, and regulatory barriers that may hinder their adoption. Using a qualitative descriptive method supported by literature analysis from recent academic studies, regulatory reports, and case examples, this research evaluates both the transformative potential and practical constraints of blockchain technology in Islamic finance. The findings reveal that smart contracts offer significant benefits such as reduced transaction costs, improved compliance monitoring, and enhanced security. However, issues related to Sharia oversight, technological readiness, and regulatory frameworks remain substantial challenges. The study concludes that while blockchain-based smart contracts align with several objectives of Sharia, particularly transparency and justice, their widespread implementation requires collaborative efforts between technologists, Sharia scholars, and regulators to ensure both technological reliability and Sharia compliance.
INDONESIA Kemajuan teknologi digital mendorong hadirnya bentuk baru dari praktik wakaf, salah satunya melalui aset Non-Fungiable Token (NFT). Jika sebelumnya wakaf hanya dikenal dalam bentuk konvesional seperti tanah, bangunan, maupun uang, kini mulia berkembang ke arah aset digital yang memiliki nilai ekonomi. Hal ini menimbulkan pertanyaan terkait keabsahan wakaf NFT dalam hukum Islam, khususnya jika ditinjau dengan kerangka Maqashid Syariah yang berorientasi pada tercapainya kemaslahatan bagi umat. Penelitian ini dilakukan dengan pendekatan kualitatif melalui penelitian lapangan di Badan Wakaf Indonesia (BWI) Kota Malang. Data diperoleh dari hasil wawancara dengan pihak terkait serta dokumentasi yang mendukung. Analisis berfokus pada bagaimana padangan BWI mengenai penggunaan NFT sebagai Objek wakaf produktif, sekaligus menilai kesesuaiannya dengan prinsip-prinsip syariah. Temuan penelitian menunjukan bahwa BWI Kota Malang belum memiliki aturan khusus mengenai wakaf NFT. Meski demikian, NFT tetap berpotensi dijadikan objek wakaf sepanjang memenuhi rukun dan syarat wakaf, serta dapat dianalogikan dengan wakaf saham atau wakaf uang. Dalam perspektif Maqashid Syariah, wakaf NFT dapat dipandan sebagai bagian dari maslahah ‘ammah karena sejalan dengan tujuan menjaga agama, jiwa, akal, harta, dan keturunan. Dengan demikian, wakaf NFT berpeluang menjadi instrumen baru yang bermanfaat dan berkelanjutan bagi masyarakat. ENGLISH The advancement of digital technology has introduced new opportunities in the practice of waqf, one of which is through Non-Fungible Tokens (NFTs). Traditionally, waqf has been associated with conventional assets such as land, buildings, or cash. However, in today’s context, digital assets with economic value are also considered potential objects of waqf. This development raises significant questions regarding the validity of NFT-based waqf in Islamic law, particularly when examined through the framework of Maqashid al-Shariah, which emphasizes the realization of public benefit (maslahah). This research employs a qualitative approach through field study at the Indonesian Waqf Board (BWI) Malang Branch. Data were collected from interviews with BWI representatives and supporting documentation. The analysis focuses on the institution’s perspective regarding the possibility of NFTs being classified as productive waqf assets, as well as their alignment with sharia principles. The findings reveal that BWI Malang has not yet issued specific regulations regarding NFT-based waqf. Nevertheless, NFTs may potentially serve as waqf objects provided they fulfill the essential pillars and conditions of waqf and can be analogized to cash waqf or share waqf. From the perspective of Maqashid al-Shariah, NFT-based waqf can be categorized as a form of maslahah ‘ammah (public interest), as it aligns with the objectives of preserving religion, life, intellect, wealth, and lineage. Therefore, NFT waqf holds the potential to become an innovative instrument that is both beneficial and sustainable for society. ARABIC التقدم في التكنولوجيا الرقمية دفع لظهور اشكال جديدة لممارسة الوقف، ومنها الوقف من خلال الاصول غير القابلة للاستبدال (NFT). في حين ان الوقف كان معروفا في السابق بالاشكال التقليدية مثل الارض والمباني او النقد، الا انه يتجه الآن نحو الاصول الرقمية ذات القيمة الاقتصادية. هذا يثير تساؤلات حول مشروعية وقف NFT في الفقه الاسلامي، خاصة اذا ما تم النظر اليه من منظور مقاصد الشريعة الذي يهدف الى تحقيق المصالح العامة للامة. تم اجراء هذا البحث بمنهج كيفي من خلال الدراسة الميدانية في الهيئة الاندونيسية للاوقاف (BWI) بمدينة مالانج. تم الحصول على البيانات من المقابلات مع الاطراف المعنية والوثائق الداعمة. يركز التحليل على نظرة الهيئة حول استخدام NFT كأصل للوقف الانتاجي، وتقييم مدى توافقه مع المبادئ الشرعية. اظهرت نتائج البحث ان الهيئة الاندونيسية للاوقاف بمدينة مالانج لا تملك لوائح خاصة بوقف. NFT ومع ذلك، يظل NFTقابلا لان يكون محلا للوقف طالما انه يستوفي اركان وشروط الوقف، ويمكن قياسه على وقف الاسهم او وقف النقود. من منظور مقاصد الشريعة، يمكن اعتبار وقف NFT جزءا من المصلحة العامة لانه يتماشى مع اهداف حفظ الدين والنفس والعقل والمال والنسل. بالتالي، لدى وقفNFT فرصة ليصبح اداة جديدة ومفيدة ومستدامة للمجتمع.
Abubakar Ibrahim Adamu, Hamidu Ardo, Najaatu Mohammed Bomai
The aim of this research is to analyze the cryptocurrency from Islamic Perspective. Cryptocurrency is a new phenomenon to Islamic Law. It is a digital currency that is neither issued by a central bank nor a public authority, but accepted as a medium of exchange by some individuals and entities and can be transferred, stored or traded electronically. Its legal nature remains unclear some are considering it as only medium of exchange while others as commodity, couple with some of its peculiar features such as anonymity of transacting parties, lack of control and supervision by a central authority, intangibility and speculation. The paper begins with brief introduction on the Islamic law principles governing commercial transactions. The paper continues with the explanation of the concept, nature and scope of cryptocurrency from Islamic Perspective. Analytical research methodology is used to analyze the work. At the end it is observed that contemporary Muslims scholars differ as to the position of cryptocurrency in Sharia. Some look at it as halal (permissible) in principle, while others look at it as haram (prohibited). However, the research recommends that a further research need to be conducted as to the actual legal status of cryptocurrency and its impact in both social and economic life of Muslims, this will assist in making a final decision on it.
Lola Abellia, Moetia Septi, M. Indra, Muhammad Gilang Aidil Saputra · 5 authors
This study aims to analyze Islamic scholars' fatwas regarding the sale and purchase of Non-Fungible Tokens (NFTs) from a sharia economic perspective. On the one hand, NFTs offer economic opportunities through ownership of non-duplicable digital assets. On the other hand, concerns have arisen regarding the validity of transactions, the potential for speculation, and their compliance with sharia principles such as clarity of contracts, benefits (manfa'ah), and freedom from gharar (uncertainty) and maysir (speculation/gambling). This study uses a qualitative analysis method with a library research approach, specifically content analysis of fatwas, opinions of contemporary scholars, and classical and modern fiqh literature. The results show differences of opinion among Islamic scholars. Some permit NFT transactions under certain conditions, such as clear benefits and a lawful object, while others consider NFTs to carry high speculative risks and uncertainty. These differences are influenced by understandings of the substance of NFTs as contract objects and the context in which they are used. This article concludes that caution is essential in NFT transactions. Furthermore, clear regulations and guidance from sharia authorities are needed to ensure that NFT trading practices are conducted in accordance with Islamic economic principles, thus providing fair, transparent benefits, and free from prohibited practices.
In a world where economic turbulence and financial inequities are increasingly driven by the shortcomings of fiat currency systems, this paper advances a bold and timely proposition: the integration of gold-backed cryptocurrencies into global net settlement systems through blockchain technology. Bridging the philosophical depth of Islamic economic principles with the technical power of decentralized digital infrastructure, this study outlines a visionary framework that addresses the core weaknesses of inflation, centralization, and systemic risk. Grounded in qualitative research, including expert interviews and content analysis, the paper proposes a decentralized, ethically anchored, and technologically secure model that restores intrinsic value to money. Malaysia is identified as a strategic pioneer in this transformation, leveraging its leadership in Islamic finance and fintech to initiate a paradigm shift in global monetary governance. This work not only challenges existing financial orthodoxy but also provides a blueprint for a more stable, just, and transparent future of international finance.
The rapid growth of financial technology (fintech) has transformed the global economic landscape, including the Islamic finance sector, which seeks to align innovation with Shariah principles. This study aims to analyze the opportunities and challenges of applying blockchain technology and smart contracts in the Islamic fintech ecosystem, particularly in the context of strengthening Islamic financial principles in the digital era. It employs a Systematic Literature Review (SLR) approach combined with qualitative descriptive analysis of fifteen scientific articles indexed in Scopus, ScienceDirect, Garuda, and Sinta, covering the period from 2020 to 2025. The data was analyzed thematically to identify patterns of findings, research gaps, and academic and practical implications. The results indicate that blockchain technology and smart contracts have the potential to enhance transparency, efficiency, and accountability in Islamic financial transactions. Their implementation also opens opportunities for product innovation, such as smart sukuk and Islamic crowdfunding, which foster Shariah-based financial inclusion. However, challenges remain, including unclear Shariah digital regulations, technological complexity, low digital literacy, and issues of ethics and data security. The synthesis of findings highlights the need for collaboration among regulators, technology experts, and scholars to develop adaptive and Shariah-compliant fintech standards.
The evolution of the global digital financial system is generating two main forms of digital currencies: a centralized currency system, such as Central Bank Digital Currency (CBDC), and a decentralized cryptocurrency system, like Bitcoin and Ether. This study aims to analyze the conceptual differences between the centralized (CBDC) and decentralized (Bitcoin and Ether) models and each operating mechanism. The study also examines how both models impact the stability of the economy and adherence to Shariah principles. Using the qualitative approach and exploratory design, the study examines materials on CBDC, Bitcoin, and Ether. The study collects data from central bank reports, monetary policy documents, academic articles, and technical papers published by relevant institutions. The content analysis method should identify similarities and differences between the currencies in terms of system architecture, infrastructure, technological efficiency, energy, governance and compatibility with Shariah principles. According to the study, CBDC, Bitcoin and Ether represent three distinct paradigms: Bitcoin's decentralized system, through proof-of-work, produces rather limited functionality to emphasise individual freedom and privacy, while Ether innovates the system via a switch to proof-of-stake and smart contracts, which leads to greater functionality. CBDC, on the other hand, maintains a centralized system to ensure monetary stability, but with a compromise on users' privacy. Hence, while maintaining the value of blockchain transparency and traceability without sacrificing economic stability, the study proposes a hybrid approach in order to improve transaction efficiency. The study suggests implementing a regulatory sandbox involving authorities, economists and Shariah experts as an initial test measure of this innovation to ensure security for users and compliance with the principles of Shariah in the development of a healthier digital financial ecosystem.
تناولت هذه الدراسة الفقهية مسألة المتاجرة بالرموز غير القابلة للاستبدال (NFTs)، وهي رموز رقمية فريدة تُسجَّل على تقنية البلوك تشين وتُستخدم لإثبات ملكية الأصول الرقمية. وهدفت الدراسة إلى بيان الحكم الفقهي لهذه المعاملات في ضوء القواعد العامة للمعاملات المالية في الشريعة الإسلامية، من خلال تحليل خصائص هذه الرموز ومجالات استخدامها، وبيان مدى انطباق الضوابط الشرعية على تلك المعاملات. وقد خلصت الدراسة إلى أن الحكم يتوقف على طبيعة كل حالة، حيث إن بعض صور المتاجرة بهذه الرموز قد تندرج تحت البيوع الجائزة، إذا توفرت فيها شروط الصحة وانتفت عنها المحاذير الشرعية؛ بينما بعض الصور الأخرى قد تُعد من المعاملات المحرمة، بسبب الغرر أو الجهالة أو المقامرة. وأوصت الدراسة بضرورة وضع أطر شرعية واضحة لتنظيم هذه المعاملات في ظل التطورات الرقمية المتسارعة. This jurisprudential study explores the issue of trading in Non-Fungible Tokens (NFTs), which are unique digital assets registered on blockchain technology and used to prove ownership of digital content. The study aims to determine the Islamic legal ruling on such transactions in light of the general principles of financial dealings in Islamic law, by analyzing the features of NFTs, their uses, and the extent to which they comply with Shariah standards. The study concludes that the ruling depends on the nature of each case. Some forms of NFT trading may be considered permissible sales if the necessary conditions are met and no Shariah violations are involved. However, other forms may be deemed prohibited due to uncertainty, ambiguity, or elements of gambling.
Muh. Rapi, Muh. Hanif, Ghifary Duyufur Rohman, Mukhtar Arif Siraj
Purpose This paper aims to review the perspectives and views of modern scholars on decentralized finance (DeFi) and assess the alignment of DeFi platforms and concepts with fundamental Islamic principles. The goal is to ensure that DeFi adapts to Islamic principles, maintaining the relevance of maqasid syariah within the evolving financial technology landscape. Design/methodology/approach This research uses a qualitative methodology using sentiment analysis to evaluate 133 academic articles retrieved from the Scopus database. Sentiment extraction and analysis were performed using ATLAS.ti software to analyze the scholarly discourse on DeFi from an Islamic perspective. Findings The findings of this study indicate that 59% of the studied texts exhibit positive sentiments toward DeFi, reflecting academic confidence in its potential advancements and benefits for the financial sector. Neutral sentiments constitute 25% of the responses, acknowledging both the opportunities and challenges DeFi poses. In contrast, 16% of the texts express negative views, emphasizing the need for a cautious approach to their broader implications. From an Islamic perspective, DeFi is generally permissible under the fiqh muamalah principle, provided it adheres to Sharia principles. This study suggests that implementing DeFi in financial institutions can enhance the equitable distribution of funds and resources, increase transparency and reduce transaction costs, thereby improving community welfare and economic inclusion. However, challenges in regulation and risk management necessitate cooperation among key players. Research limitations/implications This research is significant, as it offers a foundational understanding of DeFi’s potential within Islamic finance, guiding future innovations and regulatory frameworks in this emerging field. This study highlights the importance of aligning DeFi developments with Islamic principles to foster equitable and inclusive financial growth while addressing regulatory and risk management challenges. Originality/value To the best of the authors’ knowledge, this research is the first study to conduct sentiment analysis of the scientific literature on DeFi from an Islamic perspective, providing a novel viewpoint on the intersection of DeFi and Islamic principles.
Risfiana Mayangsari, Hidayat Darussalam, Edi Mulyono
This article analyzes the communication patterns that emerge and develop from the integration of Smart Contracts in Islamic financial transactions. The adoption of Smart Contracts marks a fundamental shift from traditional sighat (ijab qabul) to automated and immutable programmed communication on the blockchain. This study finds that the communication patterns involved are divided into three main dimensions: first, formal human-to-contract communication, which is the process of coding and initial agreement of the contract (such as mudharabah or murabahah) where the sighat is represented by explicit digital input; second, fully automated system-to-system communication, where Smart Contracts communicate with external data (oracles) to verify conditions and trigger self-executing transactions; and third, contract-to-ledger communication, which results in transparent and immutable transaction recording on the blockchain. Although promising efficiency and improved Sharia Compliance through the elimination of operational gharar, this programmed communication pattern poses challenges related to contract flexibility and code error risks. Therefore, it is necessary to formulate clear Sharia code standards and digital governance mechanisms recognized by the Sharia Supervisory Board to ensure that this new communication pattern validly and ethically supports maqasid syariah (Sharia objectives).
Mufti Ubaid ul Rahman, Saba Aorangzaib, Shehbaz Shabbir
The growing trends of the digital economy have profoundly influenced all aspects of human life, particularly in the financial sector, where emerging concepts such as blockchain, cryptocurrency, and non-fungible tokens (NFTs) have challenged the traditional notions of ownership, exchange, and investment. In Islamic jurisprudence (fiqh), ownership (milk) holds a fundamental position encompassing not only tangible assets but also intangible and abstract rights. This provides the essential framework for understanding and analyzing digital assets from a Shariah perspective.Blockchain, as a transparent, decentralized, and immutable digital system, has established new standards of trust and integrity in financial transactions. Cryptocurrency, being a product of this system, enables peer-to-peer exchanges without the intervention of central banks or financial institutions. From a fiqhi viewpoint, the permissibility or impermissibility of this system depends on whether it fulfills the Shariah principles of ownership, lawful exchange, and trust (amanah).Similarly, NFTs represent unique and non-replicable forms of digital property, extending the concept of ownership beyond the material realm. The crucial question arises: can assets that exist solely in digital form be recognized as legitimate “property” (mal) under Islamic law? Islamic jurisprudence identifies essential conditions for ownership including the presence of benefit (manfa‘ah), the right of disposal (tasarruf), and the owner’s responsibility (daman). When evaluated through this lens, digital assets that possess real value, are free from fraud, gambling, or usury, and have clearly defined rights, may align with the foundational fiqhi principles of ownership.From this perspective, the digital economy opens new avenues for ijtihad (juridical reasoning). It is increasingly important for Islamic jurists, economists, and technology experts to collaborate in formulating a framework that regulates modern digital assets in accordance with Islamic ethical and legal standards. Such a framework would not only promote transparency and morality in financial dealings but also ensure that technology operates within the moral and spiritual objectives of Islam.Hence, the concept of digital ownership in light of Islamic jurisprudential principles is not only plausible but also consistent with contemporary economic needs provided that its implementation prioritizes the Shariah’s core objectives of justice, trust, transparency, and responsibility.
The rapid development of financial technology has introduced cryptocurrency as a transformative innovation within the global financial system, raising fundamental questions regarding its compatibility with value-based financial models, particularly Islamic banking. Grounded in Sharīʿah principles that emphasize ethical finance, risk-sharing, asset-backed transactions, and the prohibition of ribā, gharar, and maysir, Islamic banking faces both opportunities and challenges in responding to the emergence of decentralized digital assets. This study aims to explore how Islamic banking can engage with cryptocurrency while maintaining its normative and ethical foundations, as well as to identify the key constraints that limit institutional adoption within global finance. Employing a qualitative research approach, the study conducts a systematic and interpretive review of scholarly literature, regulatory frameworks, and classical as well as contemporary Sharīʿah sources related to Islamic finance, blockchain technology, and cryptocurrency governance. The analysis reveals that blockchain technology demonstrates substantial alignment with Islamic banking principles through its transparency, traceability, and decentralized verification mechanisms, offering institutional potential in areas such as payments, trade finance, and smart contracts. However, the findings also indicate that cryptocurrency markets are characterized by high volatility, speculative behavior, weak real-sector linkage, and fragmented regulatory oversight, which raise significant ethical, financial, and governance concerns for Islamic banking institutions. Regulatory divergence and inconsistent Sharīʿah interpretations further complicate cross-border implementation and scalability. The study concludes that Islamic banking should adopt a selective and principle-oriented approach to cryptocurrency, distinguishing between permissible technological infrastructure and ethically problematic market practices.
Berikut ringkasan akademik dari tulisan “Bitcoin dalam Ekonomi Syariah: Tinjauan di Pasar Muslim”: Artikel ini mengkaji keamanan dan kepatuhan Bitcoin terhadap prinsip ekonomi syariah dalam konteks pasar Muslim, ditengah tren global kripto yang berkembang pesat. Kajian berangkat dari kebutuhan akan penilaian mendalam terkait kesesuaian Bitcoin dengan nilai maqasid al-shariah, khususnya keadilan, transparansi, dan kemaslahatan. Tujuan utama penelitian adalah mengevaluasi apakah Bitcoin dapat diadopsi dalam sistem keuangan Islam, dengan menyoroti aspek keamanan transaksi dan kepatuhan terhadap larangan riba, gharar, serta maysir. Penelitian menggunakan pendekatan mixed methods, menggabungkan survei kuantitatif dari pengguna Bitcoin di pasar Muslim serta kajian kualitatif atas literatur, fatwa, dan pendapat ulama. Hasil survei menunjukkan bahwa sebagian besar responden mengakui keunggulan teknologi blockchain dalam aspek keamanan dan transparansi, namun mengkhawatirkan volatilitas harga dan potensi spekulasi yang belum sesuai prinsip syariah. Analisis empiris dan wawancara ahli menemukan bahwa penerimaan Bitcoin secara syariah masih tergantung pada penguatan regulasi, pengawasan lembaga keuangan Islam, dan inovasi digital yang dapat mengeliminasi unsur spekulatif. Secara teoretis, penelitian berkontribusi dengan integrasi antara perspektif maqasid al-shariah dan analisis keamanan digital—memperluas pemahaman tentang potensi dan tantangan kripto dalam ekonomi Islam modern. Rekomendasi diberikan kepada regulator dan pelaku industri untuk mengembangkan instrumen kripto halal melalui smart contract, audit syariah, serta peningkatan literasi digital di kalangan masyarakat Muslim. Dengan landasan evidence-based dan pendekatan interdisipliner, artikel ini memperkuat wacana integrasi teknologi blockchain ke dalam prinsip keuangan syariah sebagai strategi inklusi dan inovasi di pasar global Muslim.
Lana AL-Khalaileh, Tareq Al-Billeh, Abdul Salam Al-Findi, Odai Al-Hailat
This study deals with a new technology in contracting, resulting from the information technology (IT) revolution in the field of electronic transactions, which is called “smart contracts”. The latter has constituted a breakthrough in the field of contracting since it provides automation, which underlies many advantages for contractors, so that the software works of smart contracts provide immediate and automatic execution of the contract, which provides speed of implementation and security from manipulation after concluding the contract. So, it provides elements of technical security and trust for this type of contract. This new contractual pattern is considered one of the first in the provisions of Islamic Sharia, which urges us to know the extent of its compatibility with its contracting system. The study concluded with several recommendations, the most significant being that international accords lack comprehensive legislation governing transactions executed through smart contracts. While they contain certain restrictions about contracts formed through contemporary electronic methods, they inadequately elucidate the characteristics of such contracts and examine their specifics. The legal issues associated with smart contracts stem from their connection to digital currency, which is banned by Sharia law.
Марат Рашитович Сафиуллин, Leonid Alekseevich Elshin, Yaroslav Kuznetsov
Objective: This study seeks to substantiate the prospects for using blockchain technologies as a mechanism to attract Islamic finance to the Russian regions, with the dual aim of mitigating sanctions-related restrictions and fostering integration into global Islamic financial ecosystems. Methodology/Approach: The research employs econometric and systems analysis to assess the macroeconomic externalities of blockchain-driven Islamic finance inflows. A methodological toolkit was developed and tested to estimate potential market capacity, using data from four Russian regions (Tatarstan, Bashkortostan, Chechnya, Dagestan) through 2030. The approach incorporates substitution modeling of lost Western capital, scenario analysis, and the application of blockchain-based financial gateways. Originality/Relevance: The originality of this work lies in linking two underexplored areas—Islamic finance and blockchain technologies—in the context of Russia’s geoeconomic reorientation toward Asia and the Global South. The study provides an innovative framework for replacing Western capital flows with investments from Islamic finance markets through decentralized fintech solutions. Main Conclusion: Findings demonstrate that the use of blockchain-based financial mechanisms can significantly expand the capacity of Russian regions to attract Islamic finance. Tatarstan and Bashkortostan show the highest potential, while Chechnya and Dagestan present smaller but strategically relevant capacities. Blockchain solutions are positioned as a breakthrough tool for overcoming international financial isolation and enabling long-term convergence with Islamic digital ecosystems. Theoretical/Methodological Contribution: The study advances the methodological basis for assessing fintech’s role in regional investment attraction by introducing a quantitative model that integrates substitution coefficients, market capitalization ratios, and penetration indices. It enriches the theoretical discourse on blockchain’s economic externalities and provides policymakers and practitioners with actionable instruments for embedding Islamic finance within regional development strategies.
This study aims to examine the development of research on the topic of “Islamic Smart Contracts” and potential research plans based on journals published on this theme. This research uses a qualitative method with a bibliometric analysis approach. The data used is secondary data on the theme “Islamic Smart Contract” from the Scopus database, with a total of 74 journal articles. The data was then processed and analyzed using the VosViewer application to map the bibliometric development of “Islamic Smart Contract” research worldwide. The results of the study found 5 clusters with the most frequently used words being smart contract, technology, blockchain, contract, transaction, fintech, blockchain technology, and islamic finance. Then, the research path topics related to Islamic Smart Contracts are Blockchain for Islamic Finance, Fintech in the Islamic Finance Industry, Smart Contracts and Cryptocurrency in Islamic Finance, Smart Contract in Sukuk and Waqf, and Islamic Smart Contracts in Banking.
1. Introduction and ObjectiveInformation asymmetry has long been recognized as a critical challenge within financial markets, where unequal access to information between contracting parties can lead to inefficient outcomes. In the context of Islamic finance, this issue manifests most prominently through adverse selection and moral hazard, both of which are substantially intensified in profit-and-loss sharing arrangements. Participatory contracts such as Mushārakah and Muḍārabah rely on mutual trust, transparency, and aligned incentives. However, empirical evidence from Islamic banking practice—particularly in Iran—shows that actual utilization of these contracts remains limited. Banks frequently avoid participatory financing and shift toward fixed-return modes (such as Murābaḥah), mainly due to the heightened risk of borrower default arising from information asymmetry, insufficient visibility into business operations, and difficulties in monitoring managerial behavior. Within this environment, adverse selection emerges before contract formation when the bank cannot accurately distinguish between high-quality and low-quality project proposals or entrepreneurs. This may result in the unintended approval of risky proposals, thereby elevating the likelihood of non-performing financing. The problem is further accentuated by limitations in credit assessment processes, inadequate transparency in project data, and disparity in profit expectations and execution approaches between banks and entrepreneurs. Recent advances in decentralized technologies—particularly Web3 architectures incorporating blockchain, decentralized identity frameworks, distributed ledgers, and programmable smart contracts—provide new opportunities to address these long-standing informational and contractual challenges. Web3 offers a structural shift from centralized information control to transparent and verifiable records shared within a network of stakeholders. Such transparency can diminish information asymmetry, reduce opportunities for misrepresentation, automate contract enforcement, and improve the reliability of credit histories. The primary objective of this research is to assess the feasibility of reducing default risk caused by adverse selection in Islamic participatory contracts through the application of Web3 technology. The study aims to: (1) Identify the core factors that generate adverse selection in participatory financing, (2) Evaluate the strength and direction of their influence on default risk, and (3) Analyze how Web3 mechanisms can mitigate these factors and enhance the practical viability of participatory contracts in Islamic banking systems.2. Methods and MaterialsThis research adopts a mixed-methods exploratory–confirmatory design. Owing to the complexity and conceptual novelty of integrating Web3 systems with Islamic financial contracts, the study began with a qualitative phase followed by quantitative model testing. Qualitative Phase: Delphi MethodThe qualitative stage employed a three-round Delphi process to identify and validate the principal determinants of adverse selection in participatory financing. The expert panel comprised university scholars in Islamic economics, senior managers of credit and risk departments in Iranian banks, and professional consultants in Islamic financial technology. The first round used open-ended questionnaires to collect diverse expert insights, resulting in an initial list of thirteen candidate factors. In the second round, a structured Likert-scale survey assessed the significance of the proposed factors. Consensus criteria were set at mean ≥ 3.5 and standard deviation ≤ 1, consistent with established Delphi methodology. In the final round, experts confirmed the final factor set, which consolidated into three primary constructs: (1) Lack of transparency in customer information, (2) Insufficient evaluation of the entrepreneur’s technical competence, and (3) Misalignment of objectives between financing partners. These validated constructs provided the basis for the structural model.Quantitative Phase: PLS-SEM AnalysisIn the second phase, a structured questionnaire was administered to 289 participants representing the same expert categories. Data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) via SmartPLS software. PLS-SEM was chosen due to:- The predictive and exploratory nature of the research,- The inclusion of higher-order and formative construct, and- Potential non-normality in expert response distributions. Model evaluation followed established metrics, including reliability (Cronbach’s alpha and composite reliability), convergent validity (AVE), discriminant validity, and structural path significance (t-statistics and p-values). Multi-collinearity was assessed using VIF values, all of which were below the acceptable threshold. Confidence levels were set at 95% with corresponding significance thresholds of p < 0.05.3. Research FindingsThe results of the structural model confirm that adverse selection exerts a direct and significant positive effect on default risk in participatory contracts (β = 0.299, p < 0.01). The components of adverse selection are strongly driven by:- Lack of transparency in customer information (β = 0.932, p < 0.001),- Misalignment of objectives between partners (β = 0.887, p < 0.001), and- Insufficient assessment of entrepreneurial competence (β = 0.885, p < 0.001). This highlights that default risk in participatory financing is not merely a result of financial capacity constraints, but is deeply rooted in information imbalances and strategic behavior at the contract initiation stage. The model further demonstrates that Web3 technologies have a significant mitigating influence. The path coefficient for Web3’s direct effect on reducing default risk is negative and statistically meaningful (β = −0.214, p < 0.01). Additionally, Web3 reduces the negative effects of adverse selection and information asymmetry, as shown by reversed and weakened path effects in the Web3-enhanced environment. Key Web3 mechanisms enabling this outcome include:- Real-time transparency and immutable information records,- Smart contracts that automate profit-sharing and enforce commitments,- Decentralized digital identity (DID) systems that support reliable, tamper-proof credit histories,- Tokenization of collateral and tangible/ intangible assets, enabling verifiable and liquid security guarantees,- Reduced monitoring and enforcement costs due to auditability of on-chain transactions. 4. Discussion and ConclusionThe findings of this research indicate that the primary barrier to effective participatory financing in Islamic banking is not merely structural or regulatory, but fundamentally informational. Adverse selection emerges where transparency, competence assessment, and goal alignment are weak. Conventional mechanisms—such as collateralization and post-contract supervisory audits—provide only partial and reactive mitigation. In contrast, Web3 offers a proactive and systemic solution by embedding transparency, verifiability, and automated compliance directly into the contract infrastructure. By shifting the reliance from personal trust to systemic trust, Web3 supports the original normative philosophy of Islamic finance: equitable profit-and-loss sharing, partnership-based financing, and ethical allocation of capital. From a policy perspective, adopting Web3 frameworks may substantially increase the feasibility and attractiveness of participatory financing modes for Islamic banks that currently avoid them due to high default exposure. This study contributes to the academic discourse on risk management in Islamic finance by demonstrating a structural linkage between information theory, contract design, and emerging decentralized technological capabilities. Practically, the research proposes a hybrid risk-management strategy, integrating traditional credit evaluation frameworks with Web3-based transparency, identity assurance, and automated enforcement. Future work should examine regulatory, Shariah governance, cybersecurity considerations, and interoperability standards needed to implement Web3-based participatory financing systems at scale. Nonetheless, the present results indicate that intelligent and compliant adoption of Web3 can significantly reduce default risk and enable the revival of participatory financing models in Islamic banking.
Introduction: The rapid development of financial technology (fintech) and blockchain has brought a major transformation in the global industry, including in the Islamic finance sector. However, integrating fintech and blockchain with Sharia principles remains a challenge and has not been studied systematically. This research aims to map and analyze the development of research related to Fintech, Blockchain, and Islamic finance, identifying trends, research gaps, and future development directions. Methods: This study employed a qualitative research method with a Systematic Literature Review approach, utilizing a model prism. The data source for this study consisted of published articles obtained from Scopus and Emerald. The study's results showed that 30 articles, published in Scopus and Emerald, were published between 2015 and 2024. Results: Based on the findings obtained, it is evident that blockchain technology, fintech, and digital innovation have significant potential in enhancing the efficiency, transparency, and inclusivity of Islamic finance, particularly through applications in zakat, waqf, sukuk, and crowdfunding. Despite regulatory and collaboration challenges, these technologies have been able to eradicate poverty, support economic development, and expand access to finance, including in non-Muslim countries. Technology adoption is also influenced by religiosity factors and perception of benefits, confirming the need for global regulatory and standard support to maximize its benefits. Conclusion and Suggestion: The reviewed studies suggest that blockchain technology has significant potential to strengthen trust and compliance with Shariah by enabling smart contracts, decentralized financial products, and transparent auditing mechanisms. Moreover, fintech solutions can expand financial inclusion in Muslim-majority countries and beyond, especially for the unbanked population. However, challenges remain in terms of regulatory frameworks, Shariah standardization, scalability of blockchain applications, and the readiness of financial institutions and customers to adopt these innovations. In conclusion, while fintech and blockchain present strong prospects for advancing Islamic finance, further research and practical implementation are required to fully realize their potential in providing Shariah-compliant, inclusive, and sustainable financial services.
In recent years, decentralization and regional governance reforms have become a key priority for many countries to promote sustainable territorial development. In Morocco, the 2011 Constitution introduced advanced regionalization, granting regional governments greater autonomy and responsibilities in financing and managing local development. However, more than a decade later, questions remain about the financial performance of these regions and their capacity to mobilize and manage resources effectively. This paper aims to assess the financial performance of Moroccan regions through a case study approach. It examines regional revenue structures, expenditure patterns, fiscal autonomy, and investment capacity to evaluate the alignment between financial capabilities and the objectives of advanced regionalization. Relying on data from official sources, this study aims to provide an analytical overview of regional financial capabilities within the framework of advanced regionalization, contributes to the discussion on regional finance and governance in Morocco and formulates policy-oriented insights to support more effective and sustainable territorial development.
تتناول الدراسة أبعاد وطبيعة الفجوة المتسعة بين التطور السريع في الابتكار المالي وخاصة صعود التمويل اللامركزي (بذراعيه الأصول والعملات المشفرة ومنصات التداول الرقمية) من جهة، والتطور البطيء في الأطر القانونية والتنظيمية والرؤى الشرعية من جهة أخرى. تركز الدراسة على تحليل بعدين رئيسيين هما: تحليل القضايا المرتبطة بتلك الفجوة والإضاءات الرئيسة لبناء نظام تمويل لا مركزي إسلامي قائم على سلسلة القيم والمبادئ الأخلاقية ومتوافق مع أحكام ومقاصد الشريعة الإسلامية، ومن أبرز القضايا: قضايا الهوية والمشروعية وعلاقة التمويل اللامركزي بنظام التمويل التقليدي، إضافة إلى قضايا الاقتصاد الحقيقي مقابل الاقتصاد المالي. وتبين الدراسة طبيعة القضايا من منظور الاقتصاد الإسلامي، وأبرزها العمل على بناء نظام تمويل (لا مركزي أو مركزي) إسلامي قائم على تمويل أنشطة اقتصادية حقيقية تحقق قيمة مضافة لبناء اقتصاد حقيقي يحقق الاستقرار الاقتصادي والاجتماعي والعدل والإنصاف وحماية الحقوق واستدامة التنمية الشاملة. حيث قدمت الدراسة بعض الإضاءات الرئيسة لسلسلة القيم والمبادئ الأخلاقية التي يقوم عليها نظام التمويل الإسلامي أكان لا مركزيًا أو مركزيًا. وانتهت الدراسة إلى بعض الاستخلاصات والنتائج، ومنها حالة الرؤية الشرعية للأصول والمنصات الرقمية. وبينت الدراسة أن الاتجاه الغالب في هذه الرؤى هو التريث والانتظار في إصدار الحكم الشرعي النهائي، وأنّ هناك تعددًا في الرؤى الشرعية مع تغيّرها أحيانًا، فهي ليست مستقرة بعد ويغلب عليها الحذر. وبالرغم من ذلك تؤكد الدراسة على أهمية الاستفادة من هذا التطور التقني المالي المتسارع في ابتكار منتجات تمويلية متوافقة مع أحكام الشريعة، وهذا هو التحدي القائم من منظور الاقتصاد الاسلامي. الكلمات المفتاحية: الفجوة بين الابتكار والتنظيم الشرعي، التمويل اللامركزي الإسلامي، سلسلة القيم، الأصول الرقمية، العملات الرقمية.