"Islamic Finance Researches" (IFR)

Post-Transaction Processing Operations in the Blockchain Platform; a Model for Using Fintech in Islamic Finance

Document Type : Science - Research (Islamic Banking)

Authors

1 M.A. Student, Faculty of Economics, Kharazmi University, Tehran, Iran

2 Assistant Professor, Faculty of Economics, Kharazmi University, Tehran, Iran

Abstract

Large-scale financial operations are carried out every day in the financial markets. The stability and efficiency of this system rely on a solid infrastructure for the transfer and settlement of these transactions. This article analyzes the role that blockchain can play in improving these processes. Post-transaction processes enable buyers and sellers to exchange details, verify their activities, change ownership of documents, and exchange security. Studies have shown that the model of post-transaction processing operations based on blockchain can increase efficiency and improve their compliance with the principles of jurisprudence (fiqh) and Sharia, especially the “harmless rule” (la-zarar) and the Darya barrier (blocking the ways of evil). Also, the transparency of the blockchain network reduces the possibility of fraud and misconduct. On the other hand, the disadvantages of the current process such as delays in obtaining ownership transfer confirmation, inconsistent information, participation risk, operational risk, settlement ambiguity, the complexity of trust accounts, and costly intermediaries are minimized, which in turn leads to the improvement of compliance with Islamic jurisprudence.

Keywords

The Holy Quran.
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Volume 11, Issue 1 - Serial Number 21
February 2021
Pages 291-332
  • Receive Date: 11 May 2021
  • Revise Date: 23 September 2021
  • Accept Date: 26 October 2021