Fintech and the ethical dimensions of money creation in the age of hard forks

Mohammed Khaiata and Abdulazeem Abozaid

Chapter 5 in Islamic Finance and the Pursuit of Sustainable Prosperity, 2025, pp 92-105 from Edward Elgar Publishing

Abstract: The chapter provides an analysis from an Islamic perspective of the impact of hard forking on the rapidly evolving field of financial technology (fintech). Hard forking is a process that might lead to the creation of a new and separate version of an open-source fintech application or a cryptocurrency. Hard forking has become a common phenomenon in the cryptocurrency space and has significant implications for the fintech industry, particularly for investors and users seeking Shariah-compliant financial solutions. The study examines the hard forking process and evaluates its compliance with Islamic teachings in terms of its impacts and effects on the creation of currencies. A comprehensive review of the relevant literature and scholarly opinions on hard forking in the context of cryptocurrency is conducted in the chapter. Various case studies of prominent hard fork events in cryptocurrencies are analyzed, with a focus on the implications for Islamic investors and users. This analysis encompasses factors such as the distribution of new coins, the rationale behind the hard fork, and the compatibility of the resulting cryptocurrencies with Islamic finance principles. Although the chapter outlines several concerns related to hard forking, the Shariah analysis addresses the most serious one, i.e. the indirect creation of cryptocurrencies through hard forking.

Keywords: Fintech; Cryptocurrency; Hard fork; Creation of Money; Maqasid al-Shariah (search for similar items in EconPapers)
Date: 2025
ISBN: 9781035349678
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