Access Journal

This article presents a comprehensive investigation of tokenized Sukuk (Islamic bonds), demonstrating that blockchain technology and smart contracts have significantly positively impacted Islamic finance. Our findings discuss smart securities globally, key Sharia-related jurisprudential matters, international cases of blockchain-based or smart Sukuk implementations, examining how each case addresses critical issues in conventional Islamic financing and interview analysis. Background: Exploration of the current role of blockchain implementation in Islamic finance. Objectives: The primary objective of this article is to examine how the use of smart contracts, particularly smart Sukuk, has enhanced Islamic finance. Methods/Approach: This article employs a descriptive analytical method to discuss how smart contracts improve Islamic finance through the issuance of smart Sukuk. We utilized secondary data collected from existing literature on the evolving field of smart Sukuk, including scientific papers, professional reports, and company websites. Additionally, we conducted interviews with the CEOs of two firms, Blossom Finance and Finterra, which have integrated smart contracts into Islamic finance. Eventually qualitative analysis techniques employed by using Atlas.ti software and generate a word cloud to provide a concise overview of interviewees’ primary concerns and interests. Results: Our results are presented in four sections. First, we provide an overview of the implementation of smart securities worldwide. Next, we discuss key jurisprudential matters regarding the introduction of blockchain and smart contracts in Islamic fintech. Besides, we offer a comprehensive review of cases where blockchain and smart Sukuk have been implemented in Islamic finance, highlighting the problems addressed and the enhancements made in each case. Finally, we analyze the visual representation derived from interviews with ATLAS.ti software in the form of a word cloud. Conclusions: This article investigates how international, real-world, and innovative examples of blockchain and smart contract implementations have improved and enhanced Islamic financing processes. Overall, the advantages of using blockchain and smart Sukuk in these examples include streamlining Islamic financing processes, facilitating social financing, reducing poverty, enhancing Sukuk issuance by the banking sector, and enabling pre-purchasing and easier trading of Sukuk in secondary markets. These promising examples illustrate the significant potential of this innovative approach, which can benefit researchers and practitioners in Islamic finance. Ultimately the interviews highlighted the critical role of blockchain reinforcing the findings from the case studies.