The 11th Doha Islamic Finance Conference has suggested establishing a Shariah-compliant regulatory structure for blockchain and AI technologies.
The conference, held in Qatar, called on Islamic financial institutions, regulatory bodies, and tech experts to collaborate to standardise smart contracts, govern AI, create sandbox environments for blockchain/AI testing, and establish balanced frameworks that encourage innovation while upholding Islamic principles.
The conference’s closing statement stressed the need to accelerate the study, assessment and monitoring of evolving risk factors in decentralised finance (DeFi).
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This entails assessing how well they align (or diverge) with addressing the existing gap between innovation on one side and values as well as regulations on the other.
It reinforced that the core of Islamic finance lies in its values-driven and ethical foundation.
The Islamic financial framework achieves a equilibrium among innovation, ethical practices, and regulatory measures—developing a more equitable, Shariah-compliant, and sustainable approach. This principle holds true for centralized, decentralized, or mixed financial systems alike.
The statement highlighted that electronic games should not be governed by a singular legal judgment (hukm), since they differ in their essence, characteristics, and scope. The judgments related to them must follow principles based on Islamic law aimed at maximizing permissible advantages (masalih) such as enjoyment and recreation while reducing potential negative consequences (mafasid) linked with these games.
The statement highlighted that the exploration of futuristic jurisprudence (fiqh al mustaqbaliyyat) plays a crucial role in modern legal reasoning and the creation of religious edicts.
Considering the cognitive basis of legal reasoning during the assessment of consequences (ma’alat) and the capabilities of artificial intelligence—especially its proficiency in analyzing large datasets, formulating judgments, and reaching conclusions—it becomes evident that AI could be utilized to boost the accuracy and efficiency of predicting forthcoming judicial decisions and their outcomes.
Furthermore, it was emphasized that combining blockchain with artificial intelligence enhances Shariah compliance in Islamic banking through increased transparency, better Shariah audits, and reduced risk of tampering.
Some Islamic financial institutions have shown through practical implementations that integrating these systems can lead to improved performance. This progress allows Islamic banks to boost efficiency, create new products, and strengthen their position and competitive edge within the international finance sector. (The Peninsula)
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