English Abstract
Abstract:
The rise of digital technology has revolutionized numerous sectors, including
Islamic banking. This research explores the integration of Islamic financial contracts
within digital platforms, examining the practical applications and the adherence to
Shari'ah regulations. The study addresses a critical gap in the current literature by
analyzing how Islamic finance principles, rooted in Shari'ah law, can be effectively
implemented digitally while maintaining Shari'ah and regulatory compliance and
promoting financial inclusion. The study begins by outlining the fundamental principles
of Islamic finance, which prohibits interest (Riba), excessive uncertainty (Gharar), and
gambling (Maysir), and requires profit and loss sharing (PLS) as well as asset-backing
transactions. These principles are discussed in the context of Islamic digital contracts
to understand their compatibility and potential challenges. A comprehensive review of
selected digital platforms in Bahrain offering Islamic financial contracts is conducted,
focusing on their structures, operations, and Shari'ah compliance mechanisms.
Methodologically, the thesis employs a mixed-methods approach, combining
descriptive analysis and qualitative data. Personal interviews with industry experts and
Islamic finance specialists reveal practical structures and digitally applied contracts.
The descriptive analysis illustrates structures and practical digital implementation of
the applied Islamic financial contracts over digital platforms. The qualitative analysis
focuses on the alignment of digital financial implementation with Shari'ah principles,
identifying key compliance issues and innovative solutions. Findings indicate that while
digital platforms offer significant potential for the growth of Islamic finance by
enhancing accessibility and Shari'ah-compliance implementation, they also pose
unique challenges such as Shari'ah, legal/legislative, and technology challenges. The
study highlights successful models of digital platforms that effectively integrate
digitalization with Shari'ah compliance structures, such as the Safaghat crowdfunding
company which adapts investment agency and commodity Murabaha contracts digitally
through the platform. Furthermore, the research underscores the importance of
regulatory frameworks in supporting the development of digital Islamic finance. It calls
for enhanced collaboration between technology developers, Islamic financial
institutions (IFIs), and Shari'ah boards to ensure that digital Islamic financial products
comply with Shari'ah regulations and meet the evolving needs of consumers by keeping
pace with contemporary financial developments. The thesis concludes with some key
digitalization challenges and recommended solutions to minimize their impact. This
thesis contributes to the academic discourse by bridging the gap between traditional
Islamic finance and modern digital innovations, offering insights and practical
Indicators for the future development of Shari'ah-compliant digital financial systems.
