Islamic Ethics and Blockchain Technology: Examining the Role of Digital Identity and Trust in the Modern Era

Abstract

The convergence of Islamic ethics and blockchain technology holds significant potential in the modern financial landscape, particularly for ensuring trust and transparency in digital transactions. This paper explores the integration of block chain’s decentralized and immutable features with the ethical principles rooted in Sharia law. Blockchain technology, recognized for its ability to guarantee transparency, accountability, and security, provides a robust foundation for enhancing the digital identity and trust mechanisms essential for modern financial systems. By focusing on digital identity verification, smart contracts, and the role of blockchain in fostering Sharia-compliant financial solutions, the paper examines how Islamic values, such as justice and equity, can be embedded in blockchain applications. The research delves into the challenges and opportunities associated with aligning blockchain technology with Islamic principles, offering recommendations for future implementation. It also proposes frameworks for evaluating the ethical considerations of blockchain applications in Islamic finance. Through a comprehensive analysis, the paper emphasizes how blockchain can act as a catalyst for creating an ethical, trustworthy, and inclusive digital economy that adheres to the values of Islamic finance.