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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]

Author

Listed:
  • Khalid Ahmed Al-Ansari

    (HBKU - Hamad Bin Khalifa University [Doha, Qatar])

  • Ahmet Faruk Aysan

    (HBKU - Hamad Bin Khalifa University [Doha, Qatar])

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.

Suggested Citation

  • Khalid Ahmed Al-Ansari & Ahmet Faruk Aysan, 2022. "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 : ," Post-Print hal-03688607, HAL.
    • Handle: RePEc:hal:journl:hal-03688607
    Note: View the original document on HAL open archive server: https://hal.science/hal-03688607v2
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    References listed on IDEAS

    as
    1. Ahmet Faruk Aysan & Hüseyin Bedir Demirtaş & Mustafa Saraç, 2021. "The Ascent of Bitcoin: Bibliometric Analysis of Bitcoin Research," JRFM, MDPI, vol. 14(9), pages 1-15, September.
    2. Khalid Ahmed Al-Ansari & Ahmet Faruk Aysan, 2021. "More than ten years of Blockchain creation: How did we use the technology and which direction is the research heading? [Plus de dix ans de création Blockchain : Comment avons-nous utilisé la techno," Working Papers hal-03343048, HAL.
    3. Nafis Alam & Lokesh Gupta & Abdolhossein Zameni, 2019. "Fintech and Islamic Finance," Springer Books, Springer, number 978-3-030-24666-2, January.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Blockchain; CBDCs; Internet of Things; IoT;
    All these keywords.

    JEL classification:

    • F30 - International Economics - - International Finance - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • L17 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Open Source Products and Markets
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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