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An evaluation of smart contracts: practices, legality, and sharī‘ah

Mohd. Zain, Nor Razinah and Mohamad, Khairul Azmi (2021) An evaluation of smart contracts: practices, legality, and sharī‘ah. In: Islamic fintech: insights and solutions. Palgrave Macmillan, Switzerland, pp. 91-110. ISBN 978-3-030-45826-3

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The increasing usage of blockchain technology in digital investment, cryptocurrency, and financial technology (FinTech) has led the global financial market to a new innovation of concluded contract. Instead of depending on legally drafted documents, smart contract is concluded through the computerized algorithm. Based on the smart contract, the legal relationship between the involved parties are completed online without being limited to time and space. Thus, the application of smart contract needs to be explored from both Common Law and Sharī‘ah perspectives. By adopting qualitative research design and doctrinal legal analysis, this research evaluates the best practices of the selected Commonwealth countries in accepting the application of smart contract. The majority of the selected Commonwealth countries are from Muslim countries. The evaluation of smart contract from Sharī‘ah perspective is done by investigating the views of the four main Islamic schools of legal thought i.e. Mālikī’s, Ḥanafī’s, Shāfiʿī’s, and Ḥanbalī’s. A comparative legal approach is considered in analyzing similarities and differences between the perspectives of Common Law and Sharī‘ah relating to the smart contract. These approaches are necessary to be carried out in ensuring the workability of smart contracts in blockchain for Sharī‘ah-compliant start-ups. This is essential especially to those Muslim countries that come with Common Law background. As a part of the findings, the researchers found that as long as the smart contract fulfil the required legal elements as required under both of Common Law and principles of Sharī‘ah, it can be used and referred to by the concluding parties.

Item Type: Book Chapter
Additional Information: 8634/89153
Uncontrolled Keywords: Smart contract, Blockchain, FinTech, Common Law, and Sharī‘ah
Subjects: K Law > K1001 Commercial Law
K Law > K85 Legal research
K Law > KBP Islamic Law
K Law > KBP Islamic Law > KBP1 Islamic law.Shariah.Fiqh
T Technology > T Technology (General)
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button): Institute of Islamic Banking & Finance (IIiBF)
Depositing User: Asst. Prof Nor Razinah Mohd. Zain
Date Deposited: 07 Apr 2021 12:32
Last Modified: 07 Apr 2021 12:32
URI: http://irep.iium.edu.my/id/eprint/89153

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