Sharia-compliant Digital Currency Development Debate
As more literature is published with ideas that represent a thorough transformation in several aspects of life, including political, social, and financial aspects, with opportunities and countless solutions for the problems at hand, people are becoming more familiar with digital currency in the form of Blockchain and other digital currencies.
By providing the financial system with better instruments to integrate greater integrity, transparency, and trust in it thanks to the characteristics of Blockchain, digital money then contributes to its transformation. Blockchain technology and digital currency appear to have enormous potential. The majority of the literature on its implementation, however, focuses on an easier approach to assert that bitcoin and its payment system complies with Sharia law since it is a superior form of payment to fiat money and operates according to the laws of necessity. This argument has some validity because fiat money does not fully comply with sharia law at its core.
According to some perspectives, Bitcoin and other traditional digital currencies, particularly those without a purely material intrinsic value, nevertheless have some issues with Sharia compliance. Islam has acknowledged throughout its history that items with an inherent physical value are only valued as money. The second issue is its applicability in modern society, when the state needs total control of the money supply to regulate the state of the economy and maintain stability.
Examining whether the sharia concept of blockchain originality has any components of Islamic prohibition will allow for a brief discussion of the viewpoint. From the previous description of blockchain, it is known that public key cryptography is used in blockchain security and that a decentralized network is used to record and validate transactions rather than a single server. The claim made here is that the blockchain concept is composed entirely of computational and mathematical applications, free of any parts that are illegal.
