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DIGITAL ECONOMY & TECHNOLOGY

Ethical Aspects Relating to Cyberspace: Web Ideologies

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4 years ago

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Active research on virtual communication has been conducted relatively recently – since the early 1990s – and is becoming increasingly intense. The growing interest of representatives from different humanitarian subjects (philosophers, sociologists, psychologists, culturologists, linguists) in this topic is explained not so much by the unprecedented dynamics of the development of the subject matter of research, but rather by the fundamental role that communication plays in the 2000s.

The current telecommunication technologies and, first of all, the global IT network Internet and the related cyberspace, are one of the most important factors in the development of the world community, as it has a decisive impact on the public, political, economic and socio-cultural spheres. There is therefore a clear need for a comprehensive philosophical understanding of the consequences of global computerisation and today’s society, which makes it possible to synthesise the varied data of applied sciences.

Since virtual communication is a relatively new cultural phenomenon, no comprehensible, distinct and effective system of moral regulation has yet emerged in this area. Furthermore, virtual communication has such characteristics that it can be regarded as the embodiment of a libertarian, even anarchist or apparently anarchist ideal, so that third parties are allowed to express themselves in order to control those who do so on the part of the establishment.

Virtual communication offers people unprecedented opportunities for fulfilling personal freedom, challenging its moral nature, which gives rise to many ethical problems of both a theoretical and applied nature that generally require an adequate solution.

The relevance of the problem is therefore determined, on the one hand, by the scientific and theoretical need for a holistic and systematic study of the ethical aspects of virtual communication, and, on the other hand, by the practical social need to bridge a regulatory gap in this area.

Research is mainly focused on the individuals’ activity and behaviours during computer-mediated communication, but more so directed by the web in its essence. That is, the set of rules and principles governing this communication, i.e. the morality and/or immorality of cyberspace.

There is a need for moral and philosophical reflection and an objective assessment of the virtual communication processes and their impact on society. To achieve this goal, the following tasks need to be addressed:

to characterize the specificities of virtual communication;

– to consider the key ideas of the “library” available;

– to analyse the degree of influence of these ideas on the creation of an ethos specific to cyberspace;

– to determine the status of morality in the system of normative regulators of virtual communication;

– to identify the fundamental moral principles that regulate behaviour in this sphere;

– to describe and analyse the rules that are or should be at the basis of codes of ethics in cyberspace;

– to identify the specificities of netiquette (the civilised behaviour we should have when communicating), and determine what role citizens themselves should play in their own desirable self-regulation on the Internet;

– to consider and analyse the main ethical and philosophical dilemmas generated by the emergence of the new information and communication technologies.

Hence de-anarchisation is subject to the solution of these problems.

The ethics of virtual communication or – as is commonly called – the ethics of the cybernetic network, as a field of practical philosophy is just beginning to emerge. In spite of the fact that a fairly large number of publications on the problems of human interaction with global IT networks have appeared in recent years, especially in English-speaking countries, only a small amount of these works is dedicated to the ethical aspects of such interaction, since in those countries the efforts are unscrupulously underpinned by profit and far outweigh the production of essays devoted to human and moral values.

The ethics of virtual communication is very often regarded as a continuation and development of the academic sphere of computer ethics, which is a field of applied ethics that studies the moral problems created by information technologies.

This approach seems entirely legitimate if we pay primary attention to the indirect nature of virtual interaction.

At the same time, a number of researchers believe that all computer-mediated actions, without exception, have an information nature. This means, in one way or another, having a significant impact on the infosphere, the consequences of which are only subject to moral evaluation. As a result, information becomes a completely independent subject of moral relations, and hence the ethics of computers and virtual communication acquires a status that is philosophically more significant than the ethics of information tout court, which has been developed until “recently”.

According to another viewpoint, the ethics of virtual communication should be considered one of the varieties of professional ethics, significantly closer to that of librarians and communicators (media codes of ethics, journalists’ charters, etc.). This approach is based on the analysis of the most common and socially relevant types of activities by Internet users, and hence, although with some reservations, they become representatives of different professional groups that have not only the right to exist, but also to put themselves on an equal footing with similar existing national or international institutions.

There are two main strategies to justify the web ethics: the Anglophone (mainly in the United States of America) and the German-speaking one. The Anglophone authors focus on the cultural and axiological aspects of web ethics, considering the moral problems of virtual communication within the framework of normative ethics and, as a rule, on the basis of the application of classical ethical concepts to them (primarily deontology, utilitarianism, economism, business practices). The German-speaking authors, instead, focus their attention on the communication aspects of web ethics and on a more theoretically significant but too abstract issue – whether ethics, in general, and web ethics, in particular, can be substantiated – and conduct research primarily on the basis of discourse ethics.

The methodological basis of the study is a synthetic interdisciplinary approach, as well as a comprehensive and systematic analysis of the phenomenon being studied. The proposed methodology combines the analysis of value, structural-functional and historical-genetic criteria and judgements with the main ideas of the anthropological and hermeneutic schools, as well as with the achievements of scientific disciplines such as political science, sociology, cultural studies, psychology and communication theory.

The novelty of these results consists:

– in identifying the specificities of the ethical discipline of virtual communication;

– in the thematisation and systematisation of the main ethical regulators of virtual communication;

– in the theoretical validity of the moral norms, rules and principles governing behaviours in this field.

The theoretical significance of this lies in the systematic presentation of the virtual communication processes from an ethical viewpoint, which not only makes it possible to explore the practice of cyberspace, but also serves as a prerequisite for the creation of effective mechanisms to ensure the implementation of common morals with relevant norms, rules and principles.

The results obtained can be used for further research on the problem of the influence of virtual communication on society and personality within the framework of theoretical disciplines such as ethics, pedagogy, sociology and psychology. The methodology for

 analysing communication processes can find wide application in modern mass communication theory and practice.

In most cases, virtual communication is characterised by distinctive features such as mediation, interactivity, distance and global intercultural nature. The participants’ anonymity provides ample opportunities for the construction of a personal identity as there is no status hierarchy, while their extra-institutionality, the non-development and uncertainty of social rules (including legal and moral ones), can lead to marginalisation and mockery of communication processes, which are sectarianly concentrated in a restricted group of Internet users who gradually lose contact with earthly reality.

The aforementioned characteristics, together with the imperfection of modern IT regulations, considerably limit the possibilities of organisational and legal regulation of this area, which enables participants in virtual communication to consider it “the last territory of freedom”, a new res nullius, in which to take refuge from State control. Consequently, the above mentioned voluntary moral self-regulation, which is largely spontaneous and performs compensatory functions, begins to play a priority role in the normative regulation of virtual communication. Or rather, law-makers follow their example to produce rules. Or the lawmakers themselves act as Internet users so that they can better understand the environment by entering it with anonymous roles. (1. continued)


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DIGITAL ECONOMY & TECHNOLOGY

The Digital Currency that could Upend how the Gulf Trades

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9 months ago

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September 29, 2024

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By Shruthi Nair

Project mBridge – a China-led central bank digital currency initiative, which the UAE and Saudi Arabia are part of – could have “broad strategic implications” for regional trade, according to market analysts.

A CBDC is a digital form of a country’s fiat currency, which is backed by a government. It eliminates the need for intermediaries like banks, or even other currencies such as the US dollar, to facilitate real-time, peer-to-peer, cross-border payments.

“When we look at international trade, not much has changed over the decades. It is a primitive method in the digital age,” Arun Leslie John, chief market analyst at Century Financial, said.

China’s global digital yuan transactions amounted to 7 trillion yuan ($986 billion) in the first six months of this year. The UAE’s inaugural cross-border payment utilising the digital dirham amounted to AED50 million ($13.6 million).

Considering the UAE and China are major trading partners with the total volume of bilateral trade between the two countries reaching $95 billion last year, project mBridge would significantly reduce and replace the use of dollars in this case.  However, analysts believe that it might be too early to conclude whether CBDCs could result in global de-dollarisation.

“Dollar is the choice of transaction for global trade. The US has the deepest capital, debt and equity market. Many countries around the world would want to diversify away from the dollar but they aren’t able to do so,” John said.

While Europe does not have deep debt markets, the Chinese government has capital controls over the yuan. So the only remaining choice is the dollar.

Countries such as Russia and Iran that are facing sanctions stand to be beneficiaries of CBDCs and initiatives like mBridge too. While the Russian central bank announced plans to launch its CBDC next year, the central bank of Iran said that its digital rial will be used for retail transactions, including purchasing goods and services.

“In the current international payment structure, countries can arbitrarily kick out one country from the system. This reduces strategic autonomy and political power of other countries involved,” John said.

To find out how CBDC’s work and its retail use cases, click to watch the video above


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DIGITAL ECONOMY & TECHNOLOGY

How Blockchain can Enhance Islamic Finance by Overcoming Barriers

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9 months ago

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September 16, 2024

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By Aamer Yaqub

Blockchain technology is making waves in the financial sector with its promise of transparency and immutability. These features align closely with the principles of Shariah law, which governs Islamic finance, creating significant opportunities for blockchain to overcome barriers and unlock growth. The Islamic finance sector is projected to reach approximately $6.7 trillion in assets by 2027, as noted in LSEG’s Islamic Finance Development Report. In this evolving landscape, blockchain technology is emerging as a crucial tool for addressing the unique challenges faced by Islamic finance.

Islamic finance operates under Shariah law, which prohibits practices such as interest (Riba), excessive uncertainty (Gharar), and speculative transactions (Maysir). Blockchain technology’s core attributes—transparency and decentralization—are well-suited to address these constraints. Blockchain can effectively enhance compliance with Shariah principles by providing a tamper-proof ledger and facilitating decentralized transactions. Its ability to create a permanent, verifiable record of transactions aligns well with the Islamic finance requirement for clarity and accountability.

According to Moody’s, innovations like smart contracts are poised to improve Islamic finance transactions significantly. Smart contracts are self-executing contracts with terms written directly into code. They automatically enforce Shariah-compliant rules, reducing human error and enhancing transparency. These advancements support real-time settlements, which align with Islamic finance principles of fairness and clarity. By using blockchain to overcome barriers related to transparency and automation, financial processes can become more efficient and compliant with Shariah.

Enhancing Transparency and Efficiency

One of the most significant ways blockchain can overcome barriers in Islamic finance is through its ability to enhance transparency. The immutable nature of blockchain ensures that every transaction is recorded in a tamper-proof ledger, providing a clear and verifiable record of all financial activities. This transparency is crucial for maintaining compliance with Shariah principles, which demand a high level of clarity and accountability in financial transactions.

Blockchain technology facilitates smart contracts that automate the execution of Shariah-compliant financial agreements. This not only streamlines processes but also reduces the need for intermediaries, lowering transaction costs and increasing the speed and accuracy of financial transactions. By addressing long-standing challenges in Islamic finance, blockchain technology is helping to create a more efficient and reliable financial system.

Modernizing Charitable Giving

Blockchain technology also holds promise for modernizing Zakat, the obligatory charitable giving in Islam. Traditionally, the collection and distribution of Zakat have faced challenges related to efficiency and transparency. Blockchain can address these issues by providing a more transparent and efficient platform for managing charitable contributions.

With blockchain, Zakat collection and distribution can be streamlined, ensuring accurate tracking of funds and effective distribution to eligible recipients. This technology allows donors to see exactly how their contributions are used, enhancing trust and accountability. Additionally, blockchain can facilitate the creation of smart contracts to automate the distribution of Zakat, ensuring compliance with Shariah guidelines and reaching those in need more efficiently.

Addressing Challenges and Compatibility Issues

Despite its potential, the integration of blockchain into Islamic finance comes with its own set of challenges. The compatibility of digital assets, including cryptocurrencies and tokenized assets, with Shariah principles, is a topic of ongoing debate. Concerns about speculation and anonymity associated with these assets pose significant challenges, as they contrast with the Islamic finance emphasis on transparency, accountability, and ethical conduct.

Digital assets, particularly unbacked cryptocurrencies, have sparked discussions about their suitability for Islamic finance. The potential for speculation and the lack of intrinsic value associated with some digital assets diverge from Islamic finance principles that prioritize stability and ethical behavior. As a result, Shariah scholars and financial institutions are actively evaluating the compatibility of these assets with Islamic financial principles.

A promising alternative is Central Bank Digital Currencies (CBDCs), which align with Shariah principles by emphasizing transparency, fairness, and social welfare. CBDCs offer a way to digitize national currencies, providing a more efficient and accessible payment system while maintaining compliance with Islamic financial principles. This approach could address some of the concerns associated with speculative digital assets and provide a stable alternative for Islamic finance.

Islamic Finance Innovation in the UAE

The UAE serves as a notable example of how blockchain can be integrated into Islamic finance effectively. With a well-regulated Islamic finance sector, the UAE is at the forefront of digital assets innovation. The country’s regulatory framework for digital assets is overseen by key federal bodies, including the Securities and Commodities Authority (SCA) and the UAE Central Bank. While the SCA focuses on securities-related matters, the Central Bank regulates digital currencies and stored value.

The UAE also has three additional jurisdictions for digital assets regulation: the Dubai International Financial Center (DIFC), regulated by the Dubai Financial Services Authority (DFSA); the Abu Dhabi Global Market (ADGM), regulated by the Financial Services Regulatory Authority (FSRA); and the Virtual Assets Regulatory Authority (VARA). Each jurisdiction approaches digital assets regulation with a unique focus, contributing to the dynamic regulatory landscape in the UAE.

The UAE’s proactive stance on digital assets regulation and innovation underscores its commitment to leveraging blockchain technology to enhance its Islamic finance sector. The country’s regulatory framework continues to evolve, aligning with international trends and addressing emerging challenges.

Strategic Integration and Collaboration

For Islamic finance institutions to fully capitalize on blockchain technology, comprehensive adoption strategies are essential. These strategies should include technology integration, Shariah compliance, regulatory adherence, risk management, and customer education. Collaboration with Shariah scholars and experts will be vital to ensure that blockchain initiatives and digital asset offerings align with Islamic ethical and legal principles.

Many Islamic banks and financial institutions are exploring blockchain technology to streamline their operations. However, they face challenges related to regulatory compliance and interoperability with existing legacy systems. To overcome these obstacles, institutions are seeking solutions to integrate blockchain effectively while ensuring alignment with regulatory requirements and Shariah principles.

In conclusion, blockchain technology holds significant promise for overcoming barriers and unlocking growth in Islamic finance. By enhancing transparency, efficiency, and compliance with Shariah principles, blockchain can address the unique challenges of Islamic finance. As the technology continues to evolve, its integration into Islamic financial practices will likely become increasingly sophisticated, driving further innovation and growth in the sector. The potential of blockchain to transform Islamic finance underscores the need for ongoing collaboration, research, and strategic planning to fully realize its benefits.


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DIGITAL ECONOMY & TECHNOLOGY

How Blockchain Can Enhance Islamic Finance by Overcoming Barriers

Published

10 months ago

on

August 14, 2024

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Blockchain technology is making waves in the financial sector with its promise of transparency and immutability. These features align closely with the principles of Shariah law, which governs Islamic finance, creating significant opportunities for blockchain to overcome barriers and unlock growth. The Islamic finance sector is projected to reach approximately $6.7 trillion in assets by 2027, as noted in LSEG’s Islamic Finance Development Report. In this evolving landscape, blockchain technology is emerging as a crucial tool for addressing the unique challenges faced by Islamic finance.

Islamic finance operates under Shariah law, which prohibits practices such as interest (Riba), excessive uncertainty (Gharar), and speculative transactions (Maysir). Blockchain technology’s core attributes—transparency and decentralization—are well-suited to address these constraints. Blockchain can effectively enhance compliance with Shariah principles by providing a tamper-proof ledger and facilitating decentralized transactions. Its ability to create a permanent, verifiable record of transactions aligns well with the Islamic finance requirement for clarity and accountability.

According to Moody’s, innovations like smart contracts are poised to improve Islamic finance transactions significantly. Smart contracts are self-executing contracts with terms written directly into code. They automatically enforce Shariah-compliant rules, reducing human error and enhancing transparency. These advancements support real-time settlements, which align with Islamic finance principles of fairness and clarity. By using blockchain to overcome barriers related to transparency and automation, financial processes can become more efficient and compliant with Shariah.

Enhancing Transparency and Efficiency

One of the most significant ways blockchain can overcome barriers in Islamic finance is through its ability to enhance transparency. The immutable nature of blockchain ensures that every transaction is recorded in a tamper-proof ledger, providing a clear and verifiable record of all financial activities. This transparency is crucial for maintaining compliance with Shariah principles, which demand a high level of clarity and accountability in financial transactions.

Blockchain technology facilitates smart contracts that automate the execution of Shariah-compliant financial agreements. This not only streamlines processes but also reduces the need for intermediaries, lowering transaction costs and increasing the speed and accuracy of financial transactions. By addressing long-standing challenges in Islamic finance, blockchain technology is helping to create a more efficient and reliable financial system.

Modernizing Charitable Giving

Blockchain technology also holds promise for modernizing Zakat, the obligatory charitable giving in Islam. Traditionally, the collection and distribution of Zakat have faced challenges related to efficiency and transparency. Blockchain can address these issues by providing a more transparent and efficient platform for managing charitable contributions.

With blockchain, Zakat collection and distribution can be streamlined, ensuring accurate tracking of funds and effective distribution to eligible recipients. This technology allows donors to see exactly how their contributions are used, enhancing trust and accountability. Additionally, blockchain can facilitate the creation of smart contracts to automate the distribution of Zakat, ensuring compliance with Shariah guidelines and reaching those in need more efficiently.

Addressing Challenges and Compatibility Issues

Despite its potential, the integration of blockchain into Islamic finance comes with its own set of challenges. The compatibility of digital assets, including cryptocurrencies and tokenized assets, with Shariah principles, is a topic of ongoing debate. Concerns about speculation and anonymity associated with these assets pose significant challenges, as they contrast with the Islamic finance emphasis on transparency, accountability, and ethical conduct.

Digital assets, particularly unbacked cryptocurrencies, have sparked discussions about their suitability for Islamic finance. The potential for speculation and the lack of intrinsic value associated with some digital assets diverge from Islamic finance principles that prioritize stability and ethical behavior. As a result, Shariah scholars and financial institutions are actively evaluating the compatibility of these assets with Islamic financial principles.

A promising alternative is Central Bank Digital Currencies (CBDCs), which align with Shariah principles by emphasizing transparency, fairness, and social welfare. CBDCs offer a way to digitize national currencies, providing a more efficient and accessible payment system while maintaining compliance with Islamic financial principles. This approach could address some of the concerns associated with speculative digital assets and provide a stable alternative for Islamic finance.

Islamic Finance Innovation in the UAE

The UAE serves as a notable example of how blockchain can be integrated into Islamic finance effectively. With a well-regulated Islamic finance sector, the UAE is at the forefront of digital assets innovation. The country’s regulatory framework for digital assets is overseen by key federal bodies, including the Securities and Commodities Authority (SCA) and the UAE Central Bank. While the SCA focuses on securities-related matters, the Central Bank regulates digital currencies and stored value.

The UAE also has three additional jurisdictions for digital assets regulation: the Dubai International Financial Center (DIFC), regulated by the Dubai Financial Services Authority (DFSA); the Abu Dhabi Global Market (ADGM), regulated by the Financial Services Regulatory Authority (FSRA); and the Virtual Assets Regulatory Authority (VARA). Each jurisdiction approaches digital assets regulation with a unique focus, contributing to the dynamic regulatory landscape in the UAE.

The UAE’s proactive stance on digital assets regulation and innovation underscores its commitment to leveraging blockchain technology to enhance its Islamic finance sector. The country’s regulatory framework continues to evolve, aligning with international trends and addressing emerging challenges.

Strategic Integration and Collaboration

For Islamic finance institutions to fully capitalize on blockchain technology, comprehensive adoption strategies are essential. These strategies should include technology integration, Shariah compliance, regulatory adherence, risk management, and customer education. Collaboration with Shariah scholars and experts will be vital to ensure that blockchain initiatives and digital asset offerings align with Islamic ethical and legal principles.

Many Islamic banks and financial institutions are exploring blockchain technology to streamline their operations. However, they face challenges related to regulatory compliance and interoperability with existing legacy systems. To overcome these obstacles, institutions are seeking solutions to integrate blockchain effectively while ensuring alignment with regulatory requirements and Shariah principles.

In conclusion, blockchain technology holds significant promise for overcoming barriers and unlocking growth in Islamic finance. By enhancing transparency, efficiency, and compliance with Shariah principles, blockchain can address the unique challenges of Islamic finance. As the technology continues to evolve, its integration into Islamic financial practices will likely become increasingly sophisticated, driving further innovation and growth in the sector. The potential of blockchain to transform Islamic finance underscores the need for ongoing collaboration, research, and strategic planning to fully realize its benefits.


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