Integration of fiqh and digital finance: difficulties and potential in the Islamic Fintech Era

Abstract

The advancement of digital financial technology (fintech) poses both obstacles and significant potential for the integration of fiqh with the contemporary financial system, particularly within the realm of Islamic banking. Sharia fintech is a promising innovation aimed at enhancing financial access, promoting financial inclusion for the ummah, and bolstering the economic standing of Muslims, all while adhering to sharia values such as fairness, transparency, and the prohibition of usury. This integration is inherently linked to obstacles, including the constraints of rules pertaining to Islamic fintech, the insufficient comprehension of contemporary fiqh among industry stakeholders, and the necessity for new fatwas that are responsive to technological advancements. On the other hand, there is a chance to improve by developing digital Islamic financial products, such as sharia-compliant crowdfunding, halal peer-to-peer lending, and smart contracts based on fiqh agreements. This paper thoroughly examines the interplay between fiqh and financial technology while presenting strategic methods for establishing an innovative and sharia-compliant fintech sector. The collaboration among scholars, regulators, and industry stakeholders is anticipated to yield a viable solution for integrating fiqh and digital finance in response to the expanding global digital economy