LEGAL IMPLICATIONS OF APPLYING SMART CONTRACT IN ISLAMIC FINANCIAL PRODUCTS IN BRUNEI DARUSSALAM

Abstract: Smart contractsincreasingly significant in banking and non-banking world. However, due to non-viability to the existing regulatory framework, smart contract has been challenged and disputed globally as to its ability to replace an existing legal contract in its entirety, or will it only automate the execution of certain actions specified within the contract.This paper analyse the legal implications of applying smart contracts in shariah contract related especially by Islamic Finance Institutions (IFIs) in Brunei. The initial finding suggests that the smart contract is not legally viable to be implemented in shariah contracts in Brunei. The paper employs library research with main references to the policy papers, Act and legislations. Where necessary, the paper makes reference to other countries for comparative purposes. The paper concludes several suggestions and recommendations.