Crowdfunding, blockchain, and smart contracts in Islamic finance: Evaluating compliance with Maqasid al-Shariah.

Abstract

The rapid advancement of financial technology (FinTech) offers significant opportunities to strengthen Shariah-compliant financial systems through innovations such as crowdfunding, blockchain, and smart contracts. These technologies can enhance transparency, governance, and financial inclusion in line with the ethical and socio-economic objectives of Maqasid al-Shariah. This study systematically reviews how Islamic FinTech innovations are designed, implemented, and governed, and how they contribute to key maqasid objectives, particularly justice, transparency, and inclusive finance. A systematic literature review was conducted following PRISMA guidelines. Thirty-six peer reviewed conceptual, empirical, and case-based studies were analyzed to examine the structures, applications, and governance mechanisms of Islamic FinTech solutions. The findings show that Islamic crowdfunding effectively mobilizes capital for SMEs and social-impact initiatives when based on equity and profit-sharing contracts, although governance and Shariah oversight challenges remain. Blockchain technology demonstrates strong potential to improve auditability, reduce information asymmetry, and support Shariah-compliant validation across zakat, waqf, and sukuk. Smart contracts offer promise in automating permissible transactions and strengthening compliance, but require careful jurisprudential design to maintain contractual intent and flexibility. Collectively, these technologies advance maqasid objectives such as wealth protection, justice, equitable distribution, and financial inclusion, subject to regulatory harmonization and robust Shariah governance. The study provides a consolidated maqasid-oriented synthesis of Islamic FinTech research, highlighting gaps in empirical validation and maqasid-based evaluation frameworks. The findings inform regulators, Islamic financial institutions, and FinTech developers seeking to design ethical, inclusive, and transparent Shariah-compliant financial systems.