CHAIRMAN: DR. KHALID BIN THANI AL THANI
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Qatar / General

Conference recommends Shariah-compliant framework for blockchain, AI applications

Published: 10 Apr 2025 - 08:37 am | Last Updated: 10 Apr 2025 - 08:41 am
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The Peninsula

Doha, Qatar: The 11th Doha Islamic Finance Conference has recommended the development of a Shariah-compliant regulatory framework for blockchain and artificial intelligence (AI) applications.

The conference 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).

This involves evaluating their alignment (or divergence) with bridging the existing gap between innovation on one hand and values and regulations on the other. It reaffirmed that the essence of Islamic finance is founded in its value-based and ethical framework. The Islamic financial system strikes a balance between innovation, ethics, and regulation — building a fairer, more Shariah-compliant, and sustainable model. This applies equally to centralised, decentralised, or hybrid finance.

The statement emphasised that electronic games cannot be subjected to a single juristic ruling (hukm), as they vary in nature, aspects and dimensions. Their rulings are subject to Shariah-based guidelines that aim to achieve legitimate benefits (masālih) of play and entertainment while minimising the harms (mafāsid) associated with these games.

It clarified that monetary exchanges and financial transactions in electronic games — such as account creation, sales, or purchasing in-game points—follow the same ruling as the game itself (permissible or prohibited). Additionally, they must adhere to the regulations governing digital and electronic financial transactions.

The statement also underscored that the study of futuristic jurisprudence (fiqh al mustaqbaliyyāt) holds significant importance in contemporary juristic reasoning and fatwa production. Given the cognitive foundations of juristic reasoning when examining outcomes (ma’ālāt) and the nature of AI — particularly its ability to analyse big data, derive rulings, and draw conclusions — AI can be employed to enhance the effectiveness and precision of forecasting future juristic choices and outcomes.

Moreover, it highlighted that the integration of blockchain and AI strengthens Shariah compliance in Islamic banking by promoting transparency, improving Shariah auditing, and mitigating the risks of manipulation. Practical applications in some Islamic financial institutions have demonstrated the success of this integration, paving the way for Islamic banks to enhance their performance, increase efficiency, and develop innovative products — ultimately boosting their role and competitiveness in the global financial industry. 

The statement noted that AI and blockchain technology offer advanced solutions for the preservation and development and growth of waqf (endowments) by optimising asset management, improving distribution efficiency, enhancing transparency and governance, while boosting trust and sustainability. However, this digital transformation of waqf faces several challenges, including data privacy concerns, low trust in technology related to humanitarian and social aid, and financing costs. These challenges can be overcome by strengthening the waqf ecosystem, training human resources in waqf institutions, studying the obstacles to digital transformation, and making the necessary efforts to address them.

The statement also addressed the critical need to establish legal governance and algorithmic indexing of waqf documents through intelligent processing to lay the infrastructure for the project of (Waqf documents bank) in order to bridge the gap between researchers and the civilizational memory of Islamic endowments while also preserving waqf assets.

During the scientific sessions of the conference, four main themes were discussed: “Decentralized Artificial Intelligence: Rules and Regulations”, “Endowments (Waqf) in the Era of Blockchain and AI Integration”, “The Blockchain Gaming Revolution: Rulings and Investments Opportunities” and “Value Chains through Decentralized Finance Powered by AI”. The conference had the working papers presented by scholars and academicians from the field besides the discussions and interventions to enrich it.