The Implementation and Shariah Views on Cryptocurrency in Malaysia: A Survey Study

Abstract

In the Fourth Industrial Revolution era, Fintech has created a new phenomenon for Islamic Finance industries, particularly in Malaysia. To guarantee the safeguard of the new technology with the existing traditional practices, the Shariah regulation is necessary to govern the potential risk throughout the financial activities. In Malaysia, Islamic Financial Service Act (IFSA) 2013 is the guideline framework for the Shariah Advisory Council (SAC) members to monitor the Islamic Fintech activities. However, some Fintech products do not meet the shariah regulation requirement. As an example, the most famous is cryptocurrency. It has gained attention among the SAC members and other Islamic expertise related to their transaction which is said does not comply with shariah requirements in Malaysia. The cryptocurrency was decentralized network by the Blockchain. The cryptocurrency was considered to disruct many sectors such as the financial, retail market, global monetary policy, and law. Expertise criticized the cryptocurrency because of some reason including illegal activities, exchange rate volatility, and the vulnerability of the underlying infrastructure. This issue was debate among the scholar and the Islamic finance sector regarding their validity to use cryptocurrency as another channel for money exchange in this country. Therefore, the purpose of this paper is to review the implementation and shariah views on cryptocurrency in Malaysia.