Speaker
Description
ABSTRACT
The current fiat monetary system is inherently prone to depreciation of value over time due to inflationary pressures arising from credit creation. This structural weakness undermines the long-term preservation of wealth, which is a central tenet of the Maqasid al-Shari’ah. Physical gold has historically served as a stable store of value. However, Kelantan's gold dinar initiative, aimed at reintroducing gold into circulation, faced significant operational and regulatory barriers. Proof-of-work consensus mechanisms in blockchain technology have created the potential for the gold-backed cryptocurrency (GBCC). This proposed innovation is intended to be scarce, tamper-resistant, and transparent, aligning with Islamic finance principles while also addressing the portability and divisibility limitations of physical gold. This study investigates the feasibility of implementing a Shari’ah-compliant GBCC in Labuan, Malaysia. A qualitative methodology will be employed by conducting in-depth interviews with key stakeholders, including regulators, Shari’ah scholars, and fintech practitioners. A conceptual framework will be developed and presented through a vignette model to stakeholders, enabling iterative refinement based on their feedback. The study’s findings are expected to advance theory by linking the Maqasid al-Shari’ah with blockchain-based currency design to address systemic weaknesses in fiat currency. Further, it aims to contribute to practice by offering regulators and industry stakeholders a tested framework for developing GBCC. This may enhance cross-border investment opportunities and strengthen Labuan’s position as an international hub for Shari’ah-compliant financial innovation.
