Category: Articles on Islamic Finance

Articles on Islamic Finance

Rethinking Modern Money

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Team discussing modern money beneath a decentralized finance whiteboard

The inclusion of dedicated sessions during the Muzakarah on The Concept of Modern Money in the Financial System and How It Relates to Money Creation as well as Preliminary Shari’ah Review on the Concept and Operation of Modern Money demonstrates that scholars now consider these issues worthy of independent and systematic examination. The discussions also indicate a shift from limiting the debate to the classical question of whether paper currency assumes the legal status of gold and silver. While this remains an important juristic issue, the contemporary monetary system presents a much broader set of questions.

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Islamic Finance and Blue Sukuk Can Unlock Pakistan’s Maritime Century: Financing the Blue Frontier

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Graphic reading “Islamic Finance and Blue Sukuk Can Unlock Pakistan’s Maritime Century” with ocean industries and financing stakeholders.

International capital markets are increasingly prioritizing ocean health. According to the World Bank, the blue bond and blue Sukuk market has expanded exponentially, with global issuances surpassing billions of dollars to fund conservation, sustainable aquaculture, offshore renewable energy and green port infrastructure [2]. That blindness in Pakistan is finally beginning to lift. The Ministry of Maritime Affairs’ Maritime @100 vision, aiming to transform the economy into a $100 billion contributor by 2047, and the National Fisheries and Aquaculture Policy 2025–2035 represent important steps [3].

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Is a Crypto Asset Mal? Two Schools, One Answer – Part 4

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Illustration reading “Is a Crypto Asset Mal?” with “Classical Economics,” “Digital Innovation,” “MAL! Unsubstantiated Value,” “New Asset Class! Part of the Future,” “Crypto Asset,” and “Two Schools, One Answer – Part 4.”

This paper does not re-argue either view. Part 2 showed that crypto assets, in general, are mal under the Maliki, Shafi’i, and Hanbali schools, referred to together as the Jumhur. [1] Part 3 showed the same conclusion under the Hanafi school, reached through a different structure. [2] This paper places the two findings side by side and asks one question: does the difference in structure change anything in practice? As a quick recap, the Jumhur include permissibility of benefit directly into the definition of mal, so asking whether something is mal already includes asking whether it is lawful (halal). The Hanafi school splits this into two separate steps instead. First, is it mal at all using it as a general term. Second, is it a valid or valuable asset in Shari’ah (mal mutaqawwam).

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Is a Crypto Asset Mal? The Hanafi View – Part 3

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Text reads "Is a Crypto Asset Mal? The Hanafi View — Part 3" above three men discussing an open Quran and cryptocurrency chart on a laptop.

In Hanafi school, saying something is not mal at all is different from saying, it is mal but unlawful. The first claim removes the thing from the law of wealth completely. The second keeps it inside that law and then restricts it. This part deals only with the first question, whether a crypto asset is mal at all. The second question, whether it is also lawful or not, is addressed in the later articles of this series.

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Beyond Prohibitions: Unveiling the Hidden Dynamics of Islamic Economics and Finance

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Book titled Islamic Finance Principles Practice and Innovation by Dr. Abdullah Al-Hassan with intricate gold and teal Islamic design

This research paper provides a theoretical reframing of the objectives underlying Islamic economics and finance. While Islamic finance is largely known for avoiding specific prohibitions—such as Riba (interest), Gharar (excessive ambiguity), and Maysir (gambling)—critics argue that it has become operationally identical to conventional finance. The author argues against this phenomenon of ‘Shariah arbitrage’, where the outward form is Islamic but the substance remains conventional.

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Pricing Benchmark, Money Market Instruments and Monetary Policy

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Islamic banks currently use the same interbank offered rate in pricing their products. By and large, they provide debt based financing rather than equity based modes of financing. Thus, the promise of egalitarian distribution and inclusivity remains unrealized in practice at the moment. From a more pragmatic view to achieve the promise of Islamic economics, it is important to transform the way Islamic banking and finance is conducted in the contemporary monetary system. One way to achieve that is to link the payoffs to the saving deficient and saving surplus units through real sector economic payoffs. This article gives a review of literature on this issue and the next section presents an alternate proposal to achieve the aim of having a distinct system of financial intermediation which is less reliant on debt based financing and which is closely aligned with the real sector of the economy.

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Key Highlights of Islamic Finance Development Report 2025

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The 2025 Islamic Finance Development Indicator (IFDI) assessed 140 countries, with the global average score declining to 11 due to new entrants scoring low in most indicators. The top 10 countries remained unchanged, led by Malaysia and the UAE, which excelled across all five indicators. Notable shifts include Bangladesh dropping out of the top 10 due to Islamic banking sector challenges, while Tanzania showed promise with Sukuk issuance and sector growth.

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Foundational Problem with System of Interest

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Efficiency is the name of conforming to laws of nature. Ideal performance of interest driven system requires the investment to produce nearly same rate of return so that interest rate may be considered a means of sharing of profit between financier and entrepreneurs and investment may not suffer adversely, but that being grossly contrary to nature, the system is inefficient. 

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Do Islamic Cryptocurrency and Bitcoin Co-move at Different Investment Horizons?

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Islamic digital currencies must refrain from a number of actions deemed prohibited by Islamic law, in contrast to traditional cryptocurrencies like Bitcoin. They cannot entail interest-based transactions (Riba), undue speculation or uncertainty (gharar), or gambling (maysir). Their frequent backing by physical assets, such as gold, gives them inherent stability and lessens the speculative bubbles that are typical of traditional cryptocurrencies, which is what makes them so intriguing.

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Kitab al-Isharah ila Mahasin at-Tijarah

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Author explained the problem of double coincidence of wants in the barter trade. He wrote that even if the wants coincide, there may be disagreement on the counter values in exchange. Without divisibility of the good, the barter economy runs into barriers to trade. He also wrote on prudence in economic management. He emphasized the need for proactive procurement and infrastructure investments to ensure smooth supply chain, production process and market stability. He favoured procurement from the original nearby source to avoid intermediation mark-up and make purchases when the market has adequate supply and availability so as to avoid cost-push inflation.

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