Beyond the Jurisprudential Quagmire: Perspectives on the Application of Digital Currencies and Blockchain Technology in Islamic Economics and Finance

Digital currencies have received a mixed response from the Islamic banking and finance (IBandF) industry. As Shariah permissibility (or ‘compliance’) strongly influences the demand for and supply of products in the IFandB industry, the verdicts reached by Shariah scholars on digital currencies have a strong bearing on their adoption amongst users. However, the degree of divergence in verdicts (fatwas) on cryptocurrencies-ranging from impermissibility to permissibility-has added to uncertainty regarding the viability of digital currencies within the industry. Nevertheless, actors within the industry are trying to find ways in which digital currencies and the underlying technology may be applied successfully to promote the principles and objectives of Islamic economics and finance that seek to promote the holistic wellbeing of humankind. This chapter analyses pertinent regulatory issues surrounding digital currencies in general, and for Islamic economics and finance in particular.