Central Bank Digital Currencies, Internet of Things, and Islamic Finance: Blockchain Prospects and Challenges

Monnaies numériques des banques centrales, Internet des objets et finance islamique: perspectives et défis de la blockchain

Khalid Ahmed Al-Ansari () and Ahmet Aysan
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Khalid Ahmed Al-Ansari: HBKU - Hamad Bin Khalifa University [Doha, Qatar]

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Abstract: This paper introduces the need for blockchain technology integration for Islamic financial institutions. The paper presents three main applications of blockchain technology. It explains how such technology can be used in the banking and financial sectors by providing examples for each application. Given its relevancy, the paper expands on Central Bank Digital Currencies (CBDCs) as one of the blockchain applications. The paper then discusses salient points on how the banking sector would be affected by what is described as the future of money. Subsequently, an analysis of the use of blockchain in financial services and, in particular, the use for Islamic financial services is provided by examining examples of past successful implementations. The paper then introduces the Internet of Things (IoT) and illustrates the possible technology implementation in financial institutions. The inherent security weakness of IoT is summarized with the potential elimination of that weakness if combined with blockchain (BIoT). The paper concludes by providing a handful of suggestions and recommendations on the urgency of considering CBDCs for future daily operations, integrating Distributed Ledger technology, and using BIoT to safeguard the financial and clients' transaction records.

Keywords: Blockchain; CBDCs; Internet of Things; IoT (search for similar items in EconPapers)
Date: 2022-04-19
New Economics Papers: this item is included in nep-isf, nep-mon and nep-pay
Note: View the original document on HAL open archive server: https://hal.science/hal-03688607v2
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Published in ALBARAKA symposium (Digital Economy and Forseeing the future "A forward-looking vision in the light of Islamic economics"), Apr 2022, Al Madinah, Saudi Arabia

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Working Paper: Central Bank Digital Currencies, Internet of Things, and Islamic Finance: Blockchain Prospects and Challenges (2022)
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