CHALLENGES AND OPPORTUNITIES OF SHARIAH-COMPLIANT CENTRAL BANK DIGITAL CURRENCY (CBDC) IN ACHIEVING MONETARY BALANCE AND FINANCIAL INCLUSIVITY

Abstract

This study aims to comprehensively analyze the challenges and opportunities for implementing Sharia-Compliant Central Bank Digital Currency (CBDC) within the framework of the Islamic monetary economic system. With the rapid growth of financial digitalization, Central Banks globally are considering issuing CBDC to maintain monetary sovereignty. In the Sharia context, CBDC must adhere to Islamic principles, specifically the avoidance of riba (interest), gharar (excessive uncertainty), and maysir (gambling). Employing a qualitative descriptive approach based on literature review and conceptual analysis, this research identifies that Sharia-Compliant CBDC offers significant opportunities to enhance financial inclusion by providing efficient, low-cost, and accessible payment services. Regarding monetary equilibrium, CBDC could serve as a novel instrument for Islamic Central Banks to directly control liquidity without relying on interest-rate interventions. However, its implementation faces significant challenges, including the design of a Syar'i architecture (e.g., profit-sharing or qardh mechanisms for remuneration), the potential for disintermediation of Islamic banking, and risks related to cybersecurity and data protection. This study concludes that the success of Sharia-Compliant CBDC hinges on a robust regulatory framework and innovative design that ensures Syariah compliance while simultaneously achieving the objectives of monetary stability and economic equity.