Resolution No. 230 (1/24) on Smart Contracts: Activation and Termination Modi Operandi (Study of Smart Contracts and the Extent of its Relation to Cryptocurrency)
In the Name of Allah, the Entirely Merciful, the Especially Merciful
All praise is due to Allah, Lord of the worlds, may the blessings and peace of Allah be upon our master Muhammad, the seal of prophets, on his family, and all his companions
Resolution No. 230 (1/24)
Smart Contracts: Activation and Termination Modi Operandi
(Study of Smart Contracts and the Extent of its Relation to Cryptocurrency)
The Council of the International Islamic Fiqh Academy of the Organization of Islamic Cooperation, held its twenty-fourth session in Dubai (United Arab Emirates), on 7-9 Rabi’ al-Awal 1440, corresponding to 4-6 November 2019,
Having reviewed the research papers submitted to the Academy on the subject of Smart Contracts: Activation and Termination Modi Operandi (Study of Smart Contracts and its Connections to Cryptocurrency)
Having listened to the extensive discussions on the subject,
Resolves the following
First, confirmation of the resolution of the International Islamic Fiqh Academy No. 52 (3/6), in its sixth session, held in Jeddah in 1440/1990, with all its paragraphs, on contracting using modern communication devices. This resolution also applies for electronic contracts which are independent of smart contracts.
Second, the concept of smart contracts:
It is an automatically implemented contract between two parties based on the idea of a peer-to-peer system through a decentralized distribution network (blockchain), which operates by encoded (encrypted) currencies such as bitcoin and others.
Third, smart contracts are concluded via private centralized or public decentralized platforms, and generally use cryptocurrencies.
Fourth, the Academy decided to postpone adopting a resolution on the subject, until holding a specialized symposium on smart contracts and after adopting a resolution on cryptocurrencies, in order to study all aspects of smart contracts, with a focus on those mentioned earlier in paragraph II. Moreover, it would be advisable to invite technical specialists in the blockchain, cryptocurrencies and other areas.
Allah Knows Best