INTRODUCING MAQĀSIDIC FRAMEWORK FOR CENTRAL BANK DIGITAL CURRENCY (CBDC)

Abstract

Money is a social convention performing its functions to facilitate the socio-economic ecosystem. For decades, money has evolved from barter, rare piece, metal, fiat and presently a distributed blockchainbased digital money. Monetary authorities around the world are expected to advance their own national Central Bank Digital Currency (CBDC) that works effectively and efficiently. Several studies have investigated the technical, economic and feasibility of CBDC that might have an impact on monetary policy and liquidity. This study employs the maqāṣid al-sharī‘ah framework to investigate an ethical dimension of CBDC and lay out an Islamic principal guideline. The findings introduce an ethical ecosystem useful to signify the viability type of CBDC with specific characteristics and features. This is also possible in modelling the compliance aspects of digital monetary system to the Islamic monetary framework.