Islamic Banking And Finance

This paper aims at exploring the option of Shariah compliant microfinance as a viable alternative to many previous approaches adopted by the Nigerian State in tackling the menace of poverty in the land. In spite of many poverty alleviation policies and interventions of the last three decades, millions of Nigerians still live in abject poverty, while thousands of university graduates roam the streets looking for jobs. Many unemployed Nigerians with good business ideas are usually discouraged by the alarmingly high interest rate charged on start-up capitals by our local banks. To achieve its objective, this paper used both analytical and qualitative methods after thoroughly examining many relevant literature as well as empirical works. The study explores four Sharῑ'ah tools for the implementation of the proposed scheme, to wit: Mushārakah, Mudhārabah, Zakāt and Waqf. The study finds that the suggested Sharῑ'ah tools are viable and sustainable in lunching micro-finance projects in the Nigerian context. The paper further argues that exploring Islamic non-interest micro-finance options will guarantee financial inclusion of large percentage of Nigerians, pursuant to the Constitutional provision on economic rights of the entire citizenry (s.16 of the 1999 Constitution of the Federal Republic of Nigeria, as amended). The paper identifies a yet to be explored viable option, with great potentials not only in enhancing government policies for poverty alleviation, but also in assuring a large percentage of the citizens of financial inclusion.

A well-regulated economic system requires incentives that reward productive and withhold rewards from unproductive activity. Such incentives are put in place by means of legislation and enforced with the help of regulatory agencies. A well-managed system will allocate resources more efficiently than a system in which income may be gained without active participation in economic activity, by lending at interest in particular, which invariably increases the prices of finished goods without, however, adding any value. Interest-based lending produces a range of important, though rarely highlighted, side effects. They include inefficiency, indebtedness, instability, inflation, unemployment, slow or declining economic growth, and an uneven distribution of wealth. (224 pages)

This article reviews empirical studies on Islamic banking and concentrates on their main findings while highlighting future research directions. The earlier literature of Islamic banking built a foundation using normative judgment, descriptive analysis, theoretical development, and appraisal of country experiences. Subsequent research focuses on the empirical investigations without extensive analytical and theoretical exploration in the area. Recent studies focus on the financial crisis, solvency, disclosure, and financial inclusion. Even with the spillover effect on the Islamic banks after the crisis, few pieces of evidence shows that the system performs less than a conventional counterpart. The paper discusses relevant issues to Islamic banking and identifies other avenues for future research.

This conceptual review aims to analyze the performance measurement of Islamic banks based on sharia principles using the Tawhid String Relationship (TSR) concept. The method used is descriptive and qualitative, where the data sources from previous studies in the form of journals and books related to the research topic. Therefore, the formulation of the problem in this conceptual review consists of research questions as follows: (i) How should the performance of Islamic banks be based on the perspective of the Tawhid String Relationship (TSR)?; (ii) How is the implementation of the TSR concept on the performance of Islamic banks?; (iii) What is the role of the government in supporting to achieve of excellence Islamic bank performance?. The study results are that Islamic banks based on TSR have four crucial pillars: spiritual aspects, financial aspects, social aspects, and environmental aspects. Furthermore, based on this, the performance measurement of Islamic banks needs to be equipped with an Islamic Performance Ratio (IPR). Further, the government also has a significant role in improving the performance achievemnet of Islamic banks through policies that support increasing market share, such as converting state-owned conventional banks into Islamic banks. The outcome of this research is to provide information to stakeholders of Islamic banks to use an additional ratio, namely IPR, to measure the performance of Islamic banks.

The government of Iran played a primary role in converting conventional banking into Islamic banking after 1979 revolution. In 1983, the law of usury-free banking was passed, and in 1984, interest free banks started to implement Islamic banking based on the 1983 law.The banking system of Iran is being perceived as an effective tool in pursuance of Islamic economic objectives. However, far from achieving the threefold objectives of the 1983 banking act, the sector was plagued by slow growth, a large portfolio of non-performing assets and narrow range of products and services. Besides, most of people in charge of economic affairs regarded interest as an objective of non-omit able phenomenon and instead of probing into the real causes of interest entity and working out appropriate devices to eliminate it. Therefore, there is a need for introduction of new products and instruments for banking system in line with innovations in modern banking and compliance with financing new activities ...

Islamic bank in Indonesia in the last ten years shows a positive trend is quite impressive, the average asset growth of 30% is well above the average growth of conventional banks which only reached 15%. The other side, if the terms of its contribution to the national banking system is still very small, as indicated by the achievement of market share of Islamic banks until the end of December 2016 reached only 5.30% of the total national banking assets. Regarding to the objective conditions, would need the appropriate business development strategy to boost growth and expand market share, so that Islamic banks can increase their role in national economic activities. Spin-Off sharia business unit owned by a conventional bank is one of the business development strategy offered by the Banking Act. This paper aims to identify and measure the effectiveness of the implementation of the spin-off business unit into a sharia/Islamic banks (Sharia Commercial Bank-SCB) that have been carried out...

Questa ricerca ha cercato di affrontare il tema della politica monetaria da un punto di vista delle istituzioni islamiche; queste difatti, dovendo rispondere ai precetti della Shari'a ed in special modo al divieto di ribā, subiscono pesanti ripercussioni per ciò che riguarda il tema della gestione della liquidità. Così, dopo aver introdotto il problema da un punto di vista islamico, abbiamo diretto l'analisi sul caso malese, tra i più avanzati nello sviluppare strumenti di politica monetaria shari'a complaints e, più sinteticamente, si è fatta menzione anche al caso del Bahrain. Le banche centrali islamiche perseguono, nell'interesse dello sviluppo dei valori dell'Islam, gli obiettivi di stabilità e sviluppo economico, cosicché, tra le priorità da combattere vi sono disoccupazione ed inflazione; la politica monetaria quindi, dev'essere vista in quest'ottica. In un contesto economico convenzionale però, la conduzione della politica monetaria trova il suo fulcro nel controllo del tasso d'interesse, con la gestione operativa che si basa essenzialmente su tre strumenti: gestione delle riserve bancarie presso la banca centrale, operazioni di mercato aperto e

1. التعرف على مفهوم الإجارة في الفقه الإسلامي.
2. فهم طبيعة عقد الإجارة في الفقه والقانون.
3. إدراك الفروق بين الإجارة والمعاملات الأخرى الشبيهة بها.
4. فهم مقاصد الشريعة الإسلامية في الإجارة.
5. التعرف على مفهوم الإجارة المنتهية بالتمليك في الفقه الإسلامي.
6. اكتساب المهارات اللازمة للتعامل مع المنتجات المالية المبنية على عقد الإجارة.
7. استيعاب الخصائص التمويلية لعقد الإجارة.
8. التعرف على طرق تمويل المشاريع غير الجاهزة باستخدام صيغة الإجارة الموصوفة في الذمة.

Over the past few decades, the Islamic finance industry has witnessed exponential growth, intensified innovation and fast development in its products and services. This paper discusses the contemporary issues of credit cards from economic and Sharīʿah perspective and explains the implication of an optional interest clause. Islamic finance providers have experimented with different structures for Islamic credit cards, which, however, have attracted wide-reaching criticism regarding the underlying contracts and whether the concept in itself is in line with the Sharīʿah. From an analysis of the different market practices of Islamic credit cards, we notice that Islamic banks are struggling to find an appropriate approach to provide an Islamic credit card facility which is profitable and meets their financial intermediary purpose. We then propose the concept of prepaid Islamic credit cards and the idea of Master Murābaḥah Credit Card Agreement which would be more suitable and generate Sharīʿah-compliant returns. This paper also tackles the issue of consumerism and mounting indebtedness from the Sharīʿah perspective, and calls for restrictions and control by Islamic credit card issuers including limiting credits and blocking non-Sharīʿah compliant usages.

Against the background of a global economy, the current pandemic is likely to bring about a "legal pandemic" of mass insolvencies, thus threatening an economic and social collapse. The banking system remains the central pillar for the stability of a debt-structured, financialised economy, but – as shown by the financial crisis triggered in 2008 – it is also the possible epicentre of a domino-effect of insolvencies. The seminar aims at discussing the following: how did Italy and Germany tackle the emergency in the credit sector? Is the EU-legal framework on NPLs and bank capital requirements capable of preventing the risks of a legal pandemic? What is the role of the European Union and of private law?

The marvelous development in the Islamic banking necessitates sustainable practices in the emerging industry. This study intends to ascertain the most followed or usual sustainability key performance indicators (KPIs) in the Islamic banking industry of Malaysia and Pakistan. For developing the sustainability KPIs index, the study follows the systematic steps as highlighted by prior such studies. The index composed of 109 items in 7 main sections of sustainability reporting adapted to collect data through content analysis for 21 Islamic banks from both the countries for the year 2016. Despite significant heterogeneity among the Islamic banks of the two countries, it is found that they show good compliance with the sustainability indicators. Though the Islamic banking industry of Pakistan is small than that of Malaysia, but still it is good in reporting sustainable practices except for environment and product responsibility, where the latter has an edge over the former. The study contributes a theoretical deliverable i.e. sustainability KPIs index for the Islamic banking industry through testing it with data from 21 Islamic banks from Malaysia and Pakistan. The findings could be significant for practitioners, regulators, policymakers, and especially the Islamic banking industry of both countries.

Now adays, the world is still struggling in dealing with Covid-19 and all the effects it causes. This condition has many impacts, including on the socio-economic sector and can be overcome by increasing zakat income. Given the extremely dangerous nature of the transmission of the corona virus, WHO recommends the use of digital money. This also applies to the payment of zakat through e-zakat (online payment of zakat). This study aims to determine the factors that influence Muzakki's decision to pay zakat online.This study uses a younger generation as a sample because of its role as the largest internet users who are able to easily learn the latest technology. This research contributes to providing new insights regarding the factors that influence consumers in using e-zakat. This research has implications for amil zakat institutions to innovate through e-zakat services and improve their services so that more consumers can serve so that the number of users will increase. Research i...

Commitment needed to maintain a balance between financial performance aspects of the operational aspects of social performance in microfinance institutions (MFI's). In this article the author conducted a literature study, by dividing the discussion of three main parts, namely: the solutions to the phenomenon of ethics violations by MFI's; Shariah principles on Islamic MFI's in accordance with ethics violations solutions; challenges to the implementation of Reviews These solutions. Based on this, the authors found the similarities of the MFI's commitment to the principles of sharia platform to implement ethical MFI's operations. In this article the author suggests four main pillars of ethical commitment as an indicator that the MFI's / MFI's sharia, implementing operational aspects equally between financial performance and social performance.

The research aims to test the influence of the variables affecting Non-Performing Financing (NPF) in this case is Financing Debt Ratio (FDR), Capital Adequacy Ratio (CAR), Operational Expense Ratio against Operation Income (BOPO), Exchange Rate, Inflation and Real National Income (PDBR). The data analysis method used in this study is multiple regression. Regression analysis method, in addition to measuring the strength of the relationship between two or more variables, also shows the direction of the relationship between the dependent variable with the independent variable The result of processing obtained from the value of R2 adjusted equal to 0,362 which means variation or behavior of independent variable that is FDR, CAR, BOPO, Kurs, Inflation, and PDRB able to explain variations or the behavior of the dependent variable that is NPF equal to 36,2%. The rest is equal to 63,8% are variations or actions of other independent variables that affect the NPF but are not included in the m...

"This article focuses on the near defaults of high profile sukuk and recommends strategies for preventing defaults in the future. Due to their large size, the near defaults of the 'mega' sukuk issued by the subsidiaries of Dubai World had a great impact on confidence in the global sukuk market. The defaults and near defaults dented the reputation of sukuk as securities that offer strong protection to investors. In order to restore investor confidence in Islamic structured finance, a paradigm shift is required in the way sukuk are structured. There is a need to move away from structuring sukuk as bond-like, non-tradable instruments that mimic conventional (unsecured) bonds, and structure sukuk as asset-backed, tradable securities that enable genuine risk sharing, an essential characteristic of Islamic finance.

Using objective measures of investor protections in 170 countries, I establish that the level of investor protection matters for cross-country differences in GDP growth: countries with stronger protections tend to grow faster than those with poor investor protections.

Islamic banking has come to the forefront as being one of the fastest growing branch of the global financial industry in recent years. In this study we evaluate whether coexistence of Islamic and conventional banks promote financial stability. In this respect, we evaluate two types of financial systems: (1) A system solely comprised of conventional banks, (2) a dual system in which conventional and Islamic banks coexist and interact with each other. Accordingly, we design two agent-based models representing aforementioned systems and examine possible contagious effects and causes of bank failures by employing the volatility spillover methodology. We find that Islamic banks greatly promote stability by providing liquidity during financial shocks and create more liquidity per asset compared to conventional banks. We also find that they tend to hold more cash than conventional banks, which cushion the effects of a possible liquidity squeeze. Conventional banks, on the other hand, tend ...

Risk and uncertainty are inherent in agro projects and commodity supply chains. Given the pervasiveness of risks, farmers, agro-entrepreneurs, international agencies, and banking institutions are increasingly seeking effective and sustainable strategies and approaches to mitigate, transfer, or cope with these inherent risks. The methodology of this paper is through quantitative research based on questionnaires to identify patterns of agro-entrepreneurs in facing various types of risks. The general finding of this paper shows that agro-entrepreneurs faced various risks, which also shows there is a need to have proper Shariah-compliant financing for their agro projects through Islamic banking institutions.

Filantrophi Islam saat ini berkembang di berbagai negara di belahan dunia. Hal ini tidak terlepas dari keinginan masyarakat untuk membebaskan perekonomian dari kesenjangan sosial dan ekonomi. Salah satu bagian dari filantrophi Islam selain zakat, infaq dan shadaqah adalah wakaf.Penelitian ini bertujuan untuk mengetahui pengaruh variabel Literasi, Minat dan Religiusitas terhadap keputusan berwakaf melalui Cash Waqf Linked Sukuk di Provinsi Jawa Barat. Penelitian ini menggunakan pendekatan Mixed Method yaitu data kualitatif yang dikuantifisir. Data yang diolah adalah data primer dan sekunder. Data primer bersumber dari field research atau penelitian lapangan yang disebar kepada masyarakat yang tersebar di Provinsi Jawa Barat. Sementara data sekunder bersumber dari al-qur’an, hadist, undang-undang, buku, penelitian terdahulu serta jurnal  lainnya yang berhubungan dengan penelitian ini. Berdasarkan hasil uji statistik deskriptif, uji validitas, uji realibilitas, uji multikolinieritas, uji heteroskedasitas, uji regresi berganda menyatakan bahwa variable literasi, minat dan religiusitas berpengaruh terhadap keputusan berwakaf pada cash waqf linked sukuk. Namun berdasarkan hasil uji t (parsial) hanya variable literasi dan religiusitas yang berpengaruh secara parsial terhadap keputusan berwakaf pada cash waqf linked sukuk dengan nilai signifikansi 0.000<0.05. dan berdasarkan hasil uji F (simultan) variabel bebas meliputi literasi, minat dan religiusitas berpengaruh secara simultan terhadap keputusan berwakaf pada cash waqf linked sukuk dibuktikan dengan hasil uji Ftable lebih besar dari F hitung sebesar 79.559> 2.68. dengan diperkuat dari hasil koefisien determinan bahwa variabel literasi, minat dan religiusitas berpengaruh terhadap keputusan berwakaf pada cash waqf linked sukuk sebesar 78.9% dengan variabel lain yang tidak dimasukkan dalam penelitian ini sebesar 21.1%.
Kata kunci: Literasi, Minat, Religiusitas, Keputusan Berwakaf Pada Cash Waqf Linked
Sukuk
Daftar Pustaka (2004-2019)

This study proposes to determine the board management structure, bad debt, and efficiency of the profitability of the Islamic banks during 2007-2017 period. The quantitative data has been analyzed by using multiple regression analysis to determine the effect of independent variables on the variable dependent. Furthermore, the statistic tools used in the data process is Stata version 13. This study shows that the board of directors of the parent bank has a negative and significant influence on profitability. The problem financing has a negative and significant effect on profitability. Likewise, the ratio of operational costs also has a negative and significant effect on profitability. Thus, the existence of a parent bank&#39;s board of management to improve the performance of Islamic banks needs to be considered because it has not been able to provide an optimal contribution. In addition, the significant amount of financing quality and the use of inefficient operational costs have be...

Islam offers its own social, political, and economic approaches that, if applied, will contribute positively to poverty reduction and income inequality, and thus result in improved human capital and economic development. zakat means worshipping Allah by giving that which He has enjoined of various sorts of zakat to those that are entitled to them, consistent with the rules approved in Sharia. This study examines the socioeconomic impact of zakat on human capital and economic development. Data for the study was primary data drawn from Fagge, Nassarawa, Tarauni, and Kumbotso Local Government Areas, Kano, Nigeria. The collection of data was through interviews with one four hundred respondents using random sampling techniques. In the end, three hundred and eighty-eight respondents were reached. It, therefore, serves as 100% of the interview. The data were analyzed using simple percentage analysis. The findings of the study show that improved payment and appropriate distribution of zakat in Kano, Nigeria shall promote human capital development. Thus, the paper concludes that zakat has a direct effect on human capital and economic development. The study, therefore, recommends integrating zakat into the overall development strategy and strengthen zakat institutions.

Can a democratic society and Sharia law co-exist? This question increases in importance as the number of nations who follow Sharia law while modernizing is increasing. One argument suggests that there is no difference between allowing sharia tribunals to hear family and financial law and allowing Jewish families to have separate mediation. Another argument reflects that Sharia law is discriminatory against women and thus is an affront to development. This paper develops a proposal to study whether or not democracy and Sharia law can co-exist, in order to make public policy recommendations.

KATA PENGANTAR

Beberapa hal yang baru selalu muncul mengikuti perkembangan dunia yang semakin cepat berubah karena adanya teknologi-teknologi terkini yang hadir.  Perubahan itu suatu hal yang pasti tanpa seorangpun bisa mencegahnya. Lihat saja kehadiran ponsel canggih (smartphone) telah mengubah seluruh wajah dunia dalam satu genggaman.  Semuanya ada di dalam genggaman termasuk informasi-informasi mengenai bank dan lembaga keuangan.  Saat ini seorang dosen dituntut untuk berkreativitas dan berkoneksitas dengan teknolgi canggih dibidangnya jika ingin maju dan tidak ketinggaln zaman.
Dalam bidang perbankan ada perubahan yang cukup signifikan yaitu hadirnya Otoritas Jasa Keuangan (OJK) sebagai lembaga independen yang mengawasi bank mengantikan posisi yang dulu ada ditangan Bank Indonesia.  Tidak itu saja, OJK juga hadir sebagai lembaga pengawas lembaga keuangan non bank yang sebagian dulu berada dibawah kendali BAPEPAM-LK.  Kehadiran OJK sebagai lembaga baru dibidang pengawasan bank dan lembaga keuangan non bank mengubah banyak hal pada buku-buku teks tentang bank dan lembaga keuangan non bank yang  beredar saat ini. Begitu juga dengan kehadiran Lembaga Penjamin Simanan(LPS) sebagai lembaga penjamin simpanan nasabah di bank.
Penulis mencoba menyelami dan mengambil suatu kesempatan untuk mencoba menulis buku  sesuai kondisi terkini di bidang perbankan dan lembaga keuangan mengikuti perubahan-perubahan yang sedang  terjadi.  Perubahan-perubahan yang juga sangat terasa itu diantaranya dengan kehadiran Fintech sebagai salah satu pemain baru di bidang penyaluran kredit secara online berbasiskan internet (branchless) yang otomatis menjadi lembaga keuangan non bank yang berada dibawah asuhan OJK.  Disamping itu  juga kehadiran Lembaga Keuangan Mikro baik konvensional maupun syariah yang tentunya menunggu regulasi dari pemerintah dan lembaga yang mengawasinya yakni OJK. .
Pada bagian pertama buku ini yang terdiri dari sembilan bab yang membahas tentang lembaga keuangan bank yang teridiri dari (1). Overciew Lembaga Keuangan, (2). Sejarah Bank, (3). Bank Indonesia, (4). Bank Umum, (5). Kegiatan Menerima Dana, (6). Kegiatan Menyalurkan Dana, (7). Kegiatan Layana Jasa,  (8). Bank Syariah, dan (9). BPR.  Dalam bab ini Penulis mencoba menghadirkan suatu hal yang baru dengan memadukan pengalaman dibidang profesional sebagai seorang karyawan di industri perbankan, finance dan pasar modal yang dikombinasikan dengan pengalaman sebagai akademisi dibeberapa perguruan tinggi selama belasan tahun lamanya. 
Pada bagaian kedua buku ini yang terdiri dari sebelas bab, yang membahas tentang lembaga keuangan non bank yang terdiri dari (1) Fintech, (2) Perusahaan Pembiayaan Insfrastruktur, (3) Leasing, (4). Anjak Piutang, (5). Kartu Kredit, (6). Modal Ventura, (7). Pegadaian,  (8). Asuransi, (9). Pasar Modal, (10). Pasar Uang dan Valuta Asing,  dan  (11) Dana Pensiun yang  juga tidak terlepas dari pengalaman penulis sebagai seorang profesional di bidang keuangan seperti di perusahaan Leasing, di bidang pasar modal, di bidang asuransi dan bidang keuangan lainnya yang pernah bersentuhan dengan pekerjaan yang lalu. 
Pada pembahasan bab 3 buku ini terdiri dari dua bab yang membahas tentang lembaga keuangan independen merupakan suatu hal yang baru secara terpisah dari lembaga keuangan bank dan non bank. Penulis menambahkan lembaga keuangan independen sebagai salah satu unsur dalam lembaga keuagan yang secara fungsinya tidak melakukan kegiatan menerima dana (saving), menyalurkan dana (lendingg/financing) dan melayani jasa  (service). Lembaga keuangan independen menjalankan fungsinya sebagai pengaturan, pengawasan, pemeriksaan dan penyidikan  serta penjamin kegiatan lembaga keuangan bank dan non bank.  Lembaga keuangan independen ini terdiri dari; (1).  Otoritas Jasa Keuangan (OJK) dan (2). Lembaga Penjamin Simpanan (LPS)). Penulis sangat menyadari bahwa buku ini belum sempurna dan setiap pekerjaan itu pasti ada kekurangannya, termasuk dalam hal penulisan buku ini. Masih  banyak  yang harus  penulis pelajari dan kuasai.   
Buku ini hadir setelah dua tahun berjalan dalam proses penulisannya. Terkadang energi menulis ini begitu besar, teradang juga surut  karena berbagai hal. Dengan kehadiran buku ini, penulis sangat mengharapkan dukungan doa dan pemikirannya untuk kembali menyiapkan buku tentang pengalaman sebagai Account Officer di perbankan syariah.  Semoga buku ini bermanfaat bagi seluruh pembaca yang budiman.  MERDEKA
Banjarmasin,  Desember 2019

SYAFRIL

Purpose-The authors present a systematic literature review on microfinance institutions' (MFIs) effect on poverty and how they can ensure their sustainability. The purpose of this article is to review the effect of MFIs on poverty in South Asian countries. The analysis and review of the selected corpus of literature also provide avenues for future research. Design/methodology/approach-A total of 95 papers from 49 journals in 4 academic libraries and publishers were systematically studied and classified. The authors define the keywords and the inclusion/ exclusion criteria for the identification of papers. The review includes an analysis of the selected papers that give insights about publications with respect to themes, number of themes covered in individual publications, nations, scope, methodology, number of methods used and publication trend. Findings-The literature indicates the positive effect of microfinance on poverty but with a varying degree on various categories of poor. The relation between poverty and microfinance is, however, dependent on the nation under the scanner. While sustainability and outreach co-exist, their trade-off is still a matter of debate. Originality/value-This is the first systematic literature review on MFIs' effect on poverty in South Asian nations. Additionally, the authors discuss the literature on the trade-off between sustainability and outreach for MFIs.

Cash waqfs were widely used in the Ottoman Empire especially in the Balkans. This study will examine the cash waqfs in Western Thrace as financial institutions. The economic and social contributions of cash waqfs will be investigated. The Islamic financing methods also will be identified and present practices will be mentioned.

La criptomoneda es esencialmente un medio digital de cambio de moneda y una plataforma de pagos digitales que utiliza tecnología blockchain. La revolución tecnológica y digital de las últimas décadas ha significado que se han creado y utilizado sistemas de pago innovadores, y la criptomoneda es uno de los sistemas de pago más importantes para uso comercial y personal. Para los musulmanes, surge la pregunta de si las plataformas de pago criptográfico se consideran halal a los ojos de Alá y de acuerdo con los principios de la Sharia. Este ensayo abordará el uso del mercado de criptomonedas y si está permitido por las leyes islámicas.

The Blockchain introduced new concepts related to the field of finance especially by giving birth to cryptocurrencies. This technical tool is for some a revolution in the business world, while other conservatives are careful about this new technology. Among its various applications, ICO represent an attractive solution for companies seeking capital.
The Islamic orientation of ICO can be an alternative for Islamic financing of projects and businesses to the general public, i.e. companies or individuals. Our analytical and comparative approach is to prove that:
- The issue via an ICO results in the appearance of a Token representing the co-ownership of the underlying assets.
- The legal structuring of the ICOs is exposed in the light of the Islamic law.
- The ICO can constitute a tool having as legal foundation in Islamic law the contracts constituting a montage of Sukuk. This allows the issuance of all sukuk forms and therefore these smart sukuk can meet the common requirements in sukuk issuance.
- The governance of token-sukuk issuance provides a guarantee to avoid systemic risks of ICOs. Thus, the Islamic ethics of the issuer and the supervision of the Sharia Board ensure control of the use of the assets harvested for use exclusively in the project object of financing in the "Prospectus / White Paper" of token-sukuk. So, Islamic ICO is more secure for investors than conventional ICO.
- The White Paper should provide sufficient informations and conditions to validate sharia contracts.
- Compliance with Sharia norms to issue smart sukuk prevents issuers from achieving some practices that are considered as haram in sharia, such as selling sukuk-tokens before their issuance or sold them at reduced prices according to blockchain users behaviors in pre-sale phases. In addition to the bonding of the assets to the Sukuk and the periodic declaration of the value of the project, this makes the prices of smart sukuk more stable than traditional tokens with volatile value.
- The official regulation of Islamic ICO can provide a posteriori control of companies issuing ICO.

Keywords: ICO, Cryptocurrencies, Blockchain, Sukuk, Smart-Sukuk, Token-Sukuk, Islamic governance, Islamic Legal Framework.