EntrepreneurshipIslamic Finance

Muslims thought the printing press was haram – now we might be repeating that mistake – but there is a solution

In 1515 the Ottoman Empire’s Sultan Selim I issued an edict banning the use of the printing press due to concerns from Ottoman scholars that it would be disrespectful to the Qur’an and knowledge. As a result, for the next 270 years the Muslim world did not use the printing press, while the technology became widely used in Europe.

This period roughly coincided with the Reformation period that then paved the way for the industrial revolution where European countries streaked ahead of the ailing Ottoman Empire.

In retrospect, the edict wasn’t the most thought-out of moves.

Now there are concerns history could be repeating itself, and Islamic scholarship could be at the risk of stymieing innovation and new technology due to caution.

In a nutshell the issue is that new technologies need testing and fully working themselves out live in the market (as opposed to on paper or theoretically) in order to full realise their potential – and if an inopportune fatwa buts a brake on progress at the wrong point there is a high risk of the printing press scenario repeating itself.

Also, any pre-empting Sharia opinion has a high risk of being inaccurate and damaging growth and innovation in the Islamic economy. And inevitably, this only creates confusion in the Muslim market and deters any future innovation. The crypto-asset space is a recent case study of how one issue can result in multiple opinions being issued from across the globe ranging from absolutely forbidden to permissible beyond doubt.

But there is a solution. Like modern regulators have come up with a “sandbox” concept, so too Islamic scholars could come up with a “Sharia sandbox”.

Introduction to Sandboxes

The first regulatory sandbox program was implemented in the UK by the Financial Conduct Authority (FCA) and opened for applications in 2016. Since then, a series of jurisdictions have also debuted sandbox-type programs, such as Malaysia, Bahrain, Australia, Canada, Singapore, Hong Kong, South Korea and others.

A regulatory sandbox is a framework set up by a regulator that allows FinTech start-ups and other innovators to conduct live experiments in a controlled environment under a regulator’s supervision.

The sandbox seeks to provide firms with:

  • the ability to test products and services in a controlled environment
  • reduced time-to-market at potentially lower cost
  • support in identifying appropriate consumer protection safeguards to build into new products and services
  • better access to finance

How does regulation in Islam work?

The institutions of Qadha (Islamic judiciary), Hisbah (market inspection), Qarar (resolutions), Mi’yar (standards) and Fatwa (Islamic edicts) are also Islamic regulatory tools with varying strength and power. Qadha by its essence requires a thorough investigation into a case before reaching any conclusive position. Hisbah is interrogative and seeks to understand the nature of matters before action. Qarar and Mi’yar go through several rounds of drafting, reviewing, consulting and understanding before being published. However, Fatwa is more of an independent scholarly exercise which defers from place to place in terms of its rules and speed of issuance.

Conceptualising a ‘Sharia Sandbox’

An idea which could prove to be fruitful to give some Sharia regulation but allow testing is the development of what I call ‘Sharia Sandboxes’. Similar to regulatory sandboxes, ‘Sharia Sandboxes’ could house all new tech and innovative start-ups which do not explicitly and clearly involve any prohibited element yet are unclear in their nature. The objective of a Sharia sandbox would be to allow firms to get Sharia advisory services and test their products in a live environment with the oversight and guidance of Sharia advisors before any Sharia certification. A Sharia sandbox could incubate and shield any tech or start-up and give it room to grow and develop into a certified Sharia compliant offering.

The benefit of such a sandbox would be:

  • to protect the new tech and novel start-ups from any premature Fatwa against it
  • To allow the growth and support of novel ideas
  • To assist Sharia regulators, scholars and practitioners in understanding the reality of the matter
  • To breed confidence in the Muslim consumer market
  • To encourage entrepreneurs to be more innovative and daring
  • To grant full disclosure and supervision to Sharia regulators and scholars
  • To give the ability to test the product with investors and real customers
  • To give hope of potential Sharia compliance certification

How would a Sharia sandbox operate?

Similar to the regulatory sandbox journeys, a Sharia sandbox would have the following four phases:

  1. Application
  2. Evaluation
  3. Testing
  4. Exit


The application process would involve a firm submitting an application setting out its entity details, business plan, testing plan, risk assessment and describing how it meets the sandbox’s eligibility criteria.


Once a firm is accepted, the scholars and practitioners would work alongside the firm to help them finalise their testing plans and basic frameworks. This would potentially involve discounted Sharia advisory fees and discounted legal fees. Being accepted in the sandbox, and proving their business model in a live and regulated environment, would increase the firm’s credibility with both customers and investors.


This phase would allow them to test their product for a limited period of time in a live but controlled environment. Practitioners and Sharia advisors would be at hand to observe and continuously support the Sharia development of such a product.


Following the completion of testing, or the end of the agreed period, firms would have to transition out of the sandbox. This would involve a thorough report on their Sharia compliance risks as well as Sharia compliance potential. The firm would have a clearer picture if their idea is potentially Sharia compliant or if it is a high non-Sharia compliance risk. If there is potential, the firm will then need to engage a Sharia advisory firm if it wishes to scale up their services and be certified.

During the entire sandbox journey, the sharia advisors should publish working papers and thoughts-in-progress. These writings should explore Sharia reasonings and principles to provide potential valid explanations and frameworks to this tech or start-up. They are not Fatwa but purely an expression of an idea. Such writings should clearly be labelled as such to avoid confusion with Fatwa. Working papers and thoughts-in-progress are extremely beneficial for the scholarly community. These papers would stimulate exchange of ideas and facilitate further development of an idea.

What is the Fiqh basis of a Sharia Sandbox?

Any tech or start-up which enters the sandbox would be permitted to raise funds and test their product in a live and controlled environment without necessarily having a robust, end-to-end Sharia compliance certificate. This does not mean that any and every product would enter the sandbox, rather the application phase would filter out all those clearly engaged in non-compliant activities.

The classical jurists state a well-known maxim: “al-Asl fil bay’ al-Hil” (Permissibility is the original state of financial transactions) [Hashiyah al-Shilbi ala Tabyin al-Haqa’iq]

This principle means that the starting point of financial transactions is permissibility. Only when there is something explicitly impermissible or overwhelmingly doubtful should the transaction be abstained from. Thus, when there is nothing clearly impermissible, it is permissible to engage and transact whilst relying on this foundational principle. The above principle would allow the testing of all such tech and start-ups in a controlled environment which do not have any clear and explicit prohibited activity.

Further, if the scholars’ reasoning and Ijtihad conclude that it is impermissible or non-Sharia compliant, then the famous principle of “al-Ijtihad la yunqadh bil Ijtihad” could apply. The meaning of this principle is that any action based on a prior reasoning and jurisprudence will not be invalidated retrospectively. For example, if a person faced a particular direction reasoning it was the Qibla and during the prayer realised that the Qibla is actually 180 degrees behind him, they should move to the new direction. However, the prayer whilst facing the wrong direction will not be nullified. This principle has much more detail and many exceptions; it is obviously not applicable everywhere.


This idea of a Sharia sandbox is itself a thought-in-progress. The idea may have flaws or holes, but it is vital to express ideas and stimulate thought if we wish to excel and proceed in developing the Islamic economy. I welcome the thoughts of others on the above sketch.

IFG comments:

This is a great idea and one that we whole-heartedly support. From our work with startups we have seen how many pivots and tweaks any product goes through before it achieves a proper product-market fit and before people properly start using it.

Many people don’t know that Twitter started off as something completely different (a podcasting platform called Odeo) and Instagram started off as a location-based iphone app called Burbn. In the early stage of a startup, innovation is crucial and a lifeline. Any significant block to it will ultimately hold back economic growth – and my word the Muslim economy needs it. We have 0 companies in the top 100 companies in the world right now.

Mufti Faraz’s erudite analysis is particularly relevant for new technologies currently developing fast such as blockchain, artificial intelligence, biotech, robotics and automotive technologies.

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