Do regulatory sandboxes help achieve the goals (maqasid) of al-Shariah better? Case of the Islamic fintech sector

Mohammed Obaidullah

Chapter 7 in Islamic Finance in the Digital Age, 2024, pp 125-132 from Edward Elgar Publishing

Abstract: With innovation occurring at an unprecedented pace in the financial services sector, regulatory agencies must comprehend the benefits and risks associated with this innovation, while developing suitable policies, guidance, and/or regulations to harness these benefits, protect consumers, and secure the financial system. A fintech regulatory sandbox is a legal framework that establishes an environment in which participating businesses are exempt from stringent regulations-typically for a limited duration. This period allows regulators sufficient time to determine the appropriate and, potentially, a reduced set of regulations for the sector. The current study aims to re-examine the rule-making process in Shariah to explore the feasibility of adopting a sandbox approach in establishing rules for the sector. In this context, the objectives (maqasid) of al-Shariah (MaS) drive the formulation of regulations and the rules governing the behavior of individuals and firms.

Keywords: Economics and Finance (search for similar items in EconPapers)
Date: 2024
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