The Role of Blockchain Technology in Increasing Transparency and Efficiency in the Global Sharia Financial Sector

Abstract

The background of this research focuses on the role of blockchain technology which is increasingly receiving attention in improving transparency and efficiency in various economic sectors, including Islamic finance. The Islamic financial system, which prioritizes the principles of fairness and openness, requires solutions that can strengthen transaction integrity and reduce operational costs and risks. Blockchain, with its decentralized and security mechanisms, offers great potential to meet these needs on a global level. The purpose of this study is to analyze how the application of blockchain technology can improve transparency, operational efficiency, and compliance with sharia principles in the global Islamic finance sector. The study also aims to explore the challenges of blockchain implementation in countries with a growing Islamic finance ecosystem. This study uses a descriptive qualitative method with a case study approach. The data was collected through literature analysis, interviews with Islamic finance industry experts, as well as observations on blockchain projects implemented in the sector. Data analysis techniques are carried out through thematic coding to identify trends, opportunities, and obstacles in the application of blockchain technology. The results show that blockchain has significant potential in increasing transparency through immutable transaction recording and automated auditing, as well as being able to reduce transaction costs and improve operational efficiency. However, there are several key challenges such as regulations that are not fully supportive, high implementation costs, and limited infrastructure in some countries.