Transforming Islamic Economic Law for the Digital Economy: A Maqāṣid al-Sharīʿah-Based Regulatory Framework for Sustainable Financial Governance
Authors
(1)
,
Muhammad Isra
(1)
,
Mukhtar Alshodiq
(2)
Abstract
This article examines that rapid acceleration of digital financial innovations, including decentralized finance, artificial intelligence, and blockchain technologies, poses profound challenges to conventional regulatory frameworks within Islamic economic law. While these technological developments offer transformative opportunities for enhanced financial inclusion, operational efficiency, and global connectivity, they simultaneously introduce complex risks that may conflict with foundational Islamic ethical imperatives and social welfare objectives. This study investigates the integration of Maqāṣid al-Sharīʿah—the higher objectives of Islamic law—as a sophisticated, foundational mechanism to reconcile rapid digital financial innovation with enduring Islamic ethical imperatives. Utilizing a comprehensive normative and qualitative analytical approach, this research critically examines current regulatory gaps within the evolving digital economy and evaluates how the application of Maqāṣid al-Sharīʿah can inform more adaptive, principle-based financial governance. The analysis demonstrates that a regulatory framework anchored in Maqāṣid enables authorities to effectively mitigate emerging technological risks—such as information asymmetry, algorithmic bias, excessive speculation, and digital exclusion—while simultaneously upholding the essential interests of the public (Maṣlaḥah). The findings indicate that incorporating Maqāṣid-oriented criteria provides a robust, flexible, and sustainable structure for navigating the complexities of the modern digital financial landscape. Consequently, this study recommends that policymakers shift towards a more dynamic, ethics-driven regulatory architecture that prioritizes systemic transparency, socio-economic equity, and long-term sustainable development. By intentionally aligning technological advancements with the higher objectives of Islamic law, regulators can foster a secure, resilient, and innovative digital financial ecosystem that remains firmly committed to ethical governance, ultimately promoting both commercial efficiency and broad-based socio-economic justice.
Keywords:
Algorithmic Accountability, Digital Finance, Financial Ethics, Financial Inclusion, Islamic FinTech, Maqāṣid al-Sharīʿah, Regulatory Governance, Sustainable FinanceReferences
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