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Numerous studies ranging from concept papers and reviews were conducted on the matter of blockchain and digital currencies. However, those two areas are not well researched due to its being a new area of research. Furthermore, the research on blockchain applications in the Islamic financial system precisely the potential of digital currency in prov...
Citations
... The system is entirely peer-to-peer; users can enjoy greater freedom compared to national currencies. The blockchain system in cryptocurrencies promises transparency and efficiency for all economic and financial activities (Alzubaidi and Abdullah 2017). The ease and speed of making transactions that can be used across countries and continents are other advantages of cryptocurrencies (Majid et al. 2021). ...
This research aims to discover how classical Muslim scholars named Abu Ubaid and contemporary academics think about the existence and Islamic law regarding digital currency. This library research uses meta-analysis, sentiment analysis, and critical analysis. This research uses secondary data from scientific journal articles published in 2017-2023. The data source in this research was obtained from the Dimension database. The research results show that there are 106 pieces of scientific literature about digital currency from an Islamic perspective and 35 scientific kinds of literature about Abu Ubaid in the economic field with fluctuating literature development. Digital currency is not based on Abu Ubaid's thinking about the function of money because digital currency is a virtual currency that does not have underlying assets and many elements of uncertainty and other harm. Contemporary research studies also indicate a prevailing inclination towards negative rather than positive sentiment regarding the presence and implementation of Islamic law in digital currency. The dar'u al-mafasid muqaddam ala jalb al-masalih principle might help resolve the dispute between those who permit and those who forbid it. This research can be used as reference material for relevant research in the future and is helpful as material for public reflection and evaluation for policymakers to revitalize the application of digital currency by Islamic principles.
... Teknologi blockchain dapat dijelaskan secara sederhana sebagai daftar rekaman yang terhubung secara kriptografis (Nakamoto, n.d.) dan kemudian digunakan oleh beliau untuk menemukan yang dikenal secara global sebagai cryptocurrency bitcoin, teknologi blockchain didefinisikan sebagai "sistem terdistribusi sepenuhnya untuk menangkap dan menyimpan log peristiwa transaksi yang konsisten, tidak berubah, linear secara kriptografis antara pelaku jaringan." Dari definisi ini, kita dapat mengatakan dengan kata-kata sederhana bahwa teknologi blockchain adalah sebuah buku catatan yang menyimpan serangkaian transaksi yang hanya dapat diakses oleh personel yang berwenang untuk menyetujui transaksi, selain itu buku catatan ini menjamin tingkat akurasi yang tinggi karena tidak ada transaksi yang dimasukkan yang dapat dihapus setelah disetujui (Rabbani et al., 2020) Karena blockchain mencatat semua transaksi yang dilakukan, maka dapat dikatakan sebagai tumpukan blok data yang ditambahkan satu sama lain untuk membentuk rantai blok, blok-blok tersebut ditambahkan satu sama lain dalam urutan linier, kronologis untuk menunjukkan seluruh rangkaian blok mulai dari blok genesis hingga yang paling baru (Zubaidi & Abdullah, 2017 ...
Penerapan teknologi blockchain dalam industri keuangan syariah, termasuk tantangan dan peluang yang didapatkan dari implementasinya. Metodologi penelitian melibatkan literatur review dan case study dari berbagai proyek dan pilot project yang menggunakan teknologi blockchain di bidang keuangan syariah. Hasil literatur review menunjukkan bahwa teknologi blockchain mempunyai potensial besar dalam mengatasi tantangan transparansi, kesadaran risiko, dan effisiensi dalam sistem keuangan syariah. Case studies menampilkan contoh projek yang mengintegrasikan teknologi blockchain, seperti platform suku bunga shariah, sistem rincian harga jual (price disclosure system), dan solusi pembayaran digital syariah. Hasil analisis menunjukkan bahwa penerapan teknologi blockchain dalam industri keuangan syariah memiliki potensial untuk mengurangi biaya administrasi, mempermudah transaksi, dan memperluas pasar investasi syariah. Namun, masih ada tantangan yang harus ditindak lanjuti, seperti standardisasi protokol, regulasi, dan keterbatasan teknologi saat ini. Penelitian ini memberikan dasar bagi pengembangan strategi penggunaan teknologi blockchain yang lebih efektif dalam mendukung pertumbuhan industri keuangan syariah.
... From an Islamic perspective, Alzubaidi et al (2017) explored "the potential and capability of introducing a digital currency that fulfills the Islamic law (Shari'ah) functions of money and provides a more stable currency than fiat money" ( Alzubaidi et al., 2017, p.79), and found that despite the blockchain technology, CCs would require more stability to become a trusted medium of exchange. Meanwhile, Abdullah et al. (2018), "provides a framework for the development of a new national crypto-currency, which retains its' store of value in terms of monetary performance and price stability" (Abdullah, 2018, p.14), articulating that CCs should be backed by gold or silver, a view that was also echoed by Ajouz et al. (2020). ...
This research aims to clarify the impact of monetary reform on retail banking, with the introduction of private crypto-currencies (CCs) and retail central bank digital currencies (CBDCs). Given the exponential increase in private de-centralized CCs, involving stablecoins and non-backed digital assets, total crypto assets have now developed into a USD 1.04 trillion market capitalization. Governments and monetary authorities were initially reticent, but now a number of central banks are developing their own wholesale and retail CBDCs. By conducting library research, document and content analysis involving secondary data, this research confirms, involving central bank admission, that the current centralized monetary system allows commercial banks to lend the vast majority of deposit money into existence. However, the impact of private CCs and introduction of retail CBDCs will eliminate credit creation, thus rendering the commercial banking model obsolete. This will inevitably involve a structural change in the global financial system, with the separation of the public issuance of money and the private issuance of equity finance and investment. Ultimately, retail CBDCs will have to develop into public stablecoins that are pegged to intrinsic value to satisfy the store of value function of money and provide stability as the common denominator for all economic transactions.
... The literature on financial inclusion in developing contexts underscores the transformative impact of digital financial services, particularly e-wallets, in addressing barriers to traditional banking systems (Altarturi & Ajouz, 2021;Ajouz, Abdullah, & Kassim, 2019;Alzubaidi & Abdullah, 2017;Altarturi & Abduh, 2016). Within the unique socio-economic landscape of Palestine, characterized by geopolitical challenges and constraints on economic opportunities, the role of e-wallets becomes even more pronounced as a catalyst for financial inclusion and economic empowerment (Alshammari, Altarturi, & Alokla, 2021). ...
تستكشف هذه الدراسة اعتماد المحافظ الإلكترونية في فلسطين، وذلك باستخدام التحليل العاملي التوكيدي (CFA) ونمذجة المعادلات الهيكلية (SEM). يقيّم الإطار الشامل ثمانية عوامل رئيسية: النية السلوكية، وسهولة الاستخدام المدركة، والفائدة المدركة، والتأثير الاجتماعي، وظروف التسهيل، ومخاوف الخصوصية، وخصائص الابتكار، من خلال تحليل بيانات 312 مشاركا. يسلط البحث الضوء على الدور الحاسم لسهولة الاستخدام المدركة في التأثير على النية السلوكية، مع التركيز على واجهات سهلة الاستخدام. كما أن التأثير الاجتماعي، والفائدة المدركة، وخصائص الابتكار تشكل أيضًا، بشكل كبير، شكل اعتماد المحفظة الإلكترونية. إن التحقق الصارم من خلال تحميلات العوامل ومؤشرات جودة الملاءمة يعزز من صحة نموذج القياس المستخدم. توفر الدراسة رؤى قابلة للتنفيذ لأصحاب المصلحة، وتتناول عوامل مثل سهولة الاستخدام والتأثير الاجتماعي. ومع الاعتراف بقيود ومحددات الدراسة، فإن الباحثين يقترحون سبلاً للبحث المستقبلي وإدراك الطبيعة الديناميكية لاعتماد التكنولوجيا في هذا المشهد المتطور.
... Therefore, zakat can be paid using cryptocurrencies and from investments made on crypto assets as long as they have been screened and classified as Shariah-compliant; however, it shall be in line with fatwa and rules adopted in the specific jurisdiction in which the zakat payer resides (Muneeza et al., 2023). Zubaidi and Abdullah (2017) belong to the group of scholars who believe that an in-depth study needs to be conducted to find out its Shariah position. The International Islamic Fiqh Academy, a subsidiary of the organization of Islamic cooperation, also falls in this last category as in its resolution No. 237 (8/24) on electronic currencies, they resolved that the academy needs more time to conduct research prior to forming an opinion on the matter (International Islamic Fiqh Academy, 2021, p. 591). ...
... Similarly, Shariah opinion on paying zakat on cryptocurrencies can also be seen around the world, such as the fatwa issued by the Perlis Fatwa Council (Malaysia) on imposing zakat on Bitcoin (Rahman, 2020) study by Muneeza et al. (2023). Nevertheless, (Zubaidi and Abdullah, 2017) and the International Islamic Fiqh Academy are silent on the issue and referre to it as requiring more time and research on the issue. ...
Purpose
This paper aims to derive a compatible Shariah opinion on the permissibility of using cryptocurrencies by Muslims by reviewing the opinions expressed by Shariah scholars on the permissibility of cryptocurrencies.
Design/methodology/approach
This is a qualitative desk review research where the opinions expressed by the Shariah scholars on the permissibility of cryptocurrencies and the issues related to it have been analyzed using the literature. All the Shariah parameters checked pertaining to currencies have been studied and assessed to derive the Shariah opinion.
Findings
The research findings suggest that cryptocurrencies do not fully meet the characteristics of money according to Shariah principles. Scholars debate their classification as a medium of exchange due to concerns about volatility, intrinsic value and governance. The treatment of cryptocurrencies varies, and their decentralized nature prevents monopolization. Governance and resistance to manipulation are facilitated by blockchain technology. Classifying cryptocurrencies as hard money and their recognition as the primary unit of account face challenges. While they can be a store of value, price volatility and regulations must be considered. The network effect is crucial for their success, and their supply is controlled through complex protocols. These findings have implications for policymakers in Islamic finance.
Originality/value
The differences in Shariah opinions on using cryptocurrencies have been a major debate in the Islamic financial industry. A clear and comprehensive study is not found on the differences in the Shariah opinions on their reasonings, which is important for researchers and professionals in the field. Therefore, this research provides valuable insights for policymakers, scholars and practitioners in Islamic finance, contributing to the understanding of applying Islamic principles to cryptocurrencies.
... Inside of 251 countries that have recognised and know virtual currencies, there are as many as 110 countries (around 43%) that recognise digital currencies as legal currencies, for example such as Belgium, Denmark, Brunei Darussalam, Finland, Estonia, Greece, Iceland, Japan, Ireland, Singapore, Spain, Italy, South Africa, The UK and Switzerland (Bindseil, 2019;Zubaidi and Abdullah, 2017). Meanwhile, several countries that legalise digital currencies as commodities are Israel, Hong Kong, Brazil, France, Norway, the Netherlands, New Zealand, Sweden, Thailand, Zimbabwe, Turkey and Thailand. ...
... Hopefully, the digital revolution PBUH will result in a great jump in technical advancement, computers, and automation, opening up opportunities for further inventions. It has the potential to re-dimension the distance and interaction between world populations, connecting them via a large yet simple and rapid mechanism that can save expenses, boost utilization, and much more (Alzubaidi and Abdullah 2017). Waqf in Muhammadiyah can be appropriately operated. ...
The objective of this chapter is to redesign the Indonesian pension fund’s business model, management system, and new strategies to balance adequate profits, affordability, and sustainable programs. Consider the Malaysian pension system and adapt the INTERDAP application used by PT. Angkasa Pura II. Through this qualitative case study, we applied the foundations of the Triangle Sharia Justice Ecosystem (TSJE); Sharia, digitized the system, and supported green investment in the long run. By modeling the business strategy, facilitating the business model and supplier relationship management, and creating mutually beneficial management among stakeholders, the study found that Malaysia’s pension system has an investment purpose. Indonesia, on the other hand, provides pension loans only based on previously agreed cumulative contributions. Malaysia encourages people across the country to save on severance funds. The pension system is still managed conventionally. Malaysia requires a pension contribution of 23% of the employee’s base salary, while Indonesia requires only 3%. This will affect the contribution of pension funds to the GDP. Malaysia’s pension fund accounts for 60% of GDP. Besides, Indonesia is at only 6.03%. Another view is, to become a developed country, pension funds need to reach 60% of GDP by 2045 because 42% of the total supply of funds in the infrastructure sector comes from pension funds. The practical implications of this study are access to information, security, and transparency in the management of pension funds through a digital system supervised by the Sharia Regulator (BPS) and the Indonesian government’s efforts to realize that supports the green economy. This study integrates the foundations of the TSJE about pension funds management. The limitation of the research study is that more detailed studies and methods are needed to analyze this study. It is expected that this TSJE system will be applied further.KeywordsDigitalGreen investmentPension fundShariaTSJE
... The authors believed that Islamic finance has big potential to face any kind of situation/pandemic, especially the combination of Zakat and Qardh-Al-Hasan. In addition, research conducted by [10] and others [11,12] have explored the potential of Fintech, which includes AI, smart contract, blockchain, and others in the Islamic banking and finance industry in various Asian countries and their findings indicate that Fintech would benefit the industry greatly to be at par with the conventional counterparts. Hence, a lot of effort is needed to implement Fintech in the Islamic financial industry so that it would have a significant impact on society and be practiced with the Shariah spirit. ...
The aim of this research is to discuss the groundwork of building an Islamic Banking Document Screening Prototype based on a serverless architecture framework. This research first forms an algorithm for document matching based Vector Space Model (VCM) and adopts Levenshtein Distance for similarity setting. Product proposals will become a query, and policy documents by the central bank will be a corpus or database for document matching. Both the query and corpus went through preprocessing stage prior to similarity analysis. One set of queries with two sets of corpora is tested in this research to compare similarity values. Finally, a prototype of Shariah Document Screening is built based on a serverless architecture framework and ReactJS interface. This research is the first attempt to introduce a Shariah document screening prototype based on a serverless architecture technology that would be useful to the Islamic financial industry towards achieving a Shariah-compliant business. Given the development of Fintech, the output of this research study would be a complement to the existing Fintech applications, which focus on ensuring the Islamic nature of the businesses.
... According to Nian and Chuen (2015) and Cryptopedia (2021), it is possible that the price of cryptocurrencies may reach the normal volatility level once they are mature and more familiar to people. Another study (Alzubaidi and Abdullah, 2017) suggests that gold can be a physical backup for a cryptocurrency, which would solve the issue of its high volatility. ...
... According to Nian and Chuen (2015) and Cryptopedia (2021), it is possible that the price of cryptocurrencies may reach the normal volatility level once they are mature and more familiar to people. Another study (Alzubaidi and Abdullah, 2017) suggests that gold can be a physical backup for a cryptocurrency, which would solve the issue of its high volatility. ...
This research aims to study whether zakat is due on cryptocurrency (Bitcoin) and to address the issues related to imposing zakat upon it. This study is conducted based on the qualitative research method following the inductive method and explanatory research approach. The findings show that Bitcoin is
recognised as a digital asset in many countries and the tax is imposed accordingly. As such, Bitcoin is among the zakatable assets since it meets the conditions of zakat on assets. Moreover, Bitcoin as a digital currency would also be zakatable if a country recognises it as currency, as would any regulated digital currency issued by a government. Imposing zakat on Bitcoin would boost the total amount of zakat collectible, which would be beneficial for needy people. Further research is recommended to provide the zakat model for Bitcoin and other cryptocurrencies.
