Just as we were editing this book, Malaysia introduced new subsidiary legislation to regulate cryptocurrencies in the country. The news hit global headlines, particularly among the tech communities. The law, Capital Markets and Services (Prescriptions of Securities) (Digital Currency and Digital Token) Order 2019, which regulates all initial coin offerings (ICOs) and cryptocurrencies, came into force on 15 January 2019. It classifies cryptocurrencies and digital tokens or digital assets as securities. Without doubt, cryptocurrencies seem to be the most visible albeit controversial example of fintech. This further justifies the need to clarify the legal, regulatory and Sharī‘ah issues pertaining to such fintech applications.
Fintech is changing our lives for the better through unending technological applications in the finance industry. The daily lives of human beings, and even nonhumans, are now tied to technological applications where robots have taken over the roles of financial advisors. While regulators and lawmakers try to catch up with the rapid developments in financial technology, it appears the rapid rate of development in the fintech sector is outpacing regulatory frameworks. This uncertain situation is more complicated in a niche industry such as the Islamic financial services industry, which has additional faith-based filters in its product-development process. This, therefore, makes a case for the need for thought leadership in relation to this uniquely important subject in order to guide policymakers, regulators, and practitioners on the dynamics of fintech in Islamic finance, and provide a good understanding of the Sharī‘ah and legal and regulatory parameters for fintech solutions.