The adoption of FinTech and the legal protection of the digital assets in Islamic/Sharia banking linked with economic development: A case of Indonesia

Abstract

Based on the enormous growth of financial technology (FinTech) and digital assets in banking financial transactions, this research has been conducted in an Islamic banking sector. It aims to discuss and elaborate the Islamic/sharia banking, the adoption of Islamic FinTech, the legal protection of digital assets, and their role in economic development in Indonesia. To achieve the study objectives, researchers applied a comparative and normative judicial approach along with perspective and descriptive analysis methods. The results revealed the significant adoption of FinTech by the Islamic banking sector. In contrast, the findings also showed that, regardless of the availability of laws and regulations regarding FinTech in the conventional banking system, no general regulations and laws are available regarding Islamic FinTech and the protection of digital assets under the Central Bank of Indonesia and Financial Services Authority. However, there are some important guidelines regarding the legal protection for Islamic FinTech and digital assets as per the Fatwa issued by the National Shariah Board of Indonesian Ulama. Furthermore, considering the utmost importance of financial technologies, Islamic banks should embrace the innovations linked with such technologies to cater to customers' needs based on an interest-free system.