Smart-Contract-Enabled Diminishing Musharakah in Bangladesh: A Doctrinal-Functional Analysis and Six-Layer Control Architecture (International Journal of innovative inventions in Social Science and Humanities)

Summary

• The paper asks which parts of diminishing musharakah can safely be run by smart contracts and which controls keep an automated version valid under Shariah and Bangladeshi law.p.1
• The analysis reads AAOIFI Shari'ah Standards (No. 9 on ijarah and No. 12 on sharikah) alongside IFSB standards and Bangladesh Bank instructions.p.1
• Ownership-ratio updates and notices rate high for automation, while late-payment handling and damage events rate low.p.5
• When oracle feeds conflict, the contract moves into a dispute/freeze state instead of letting the code choose between sources.p.9
• A Bangladesh Bank directive on Shariah supervisory committees takes effect from 1 January 2026, as described in the press.p.7
• Arithmetic and record-keeping suit automation, while title, asset, pricing-policy, arrears and dispute functions do not.p.12

Key insights

1. Full automation is not required or advisable; code should implement only rules that already have a single approved meaning.p.4
2. Lifecycle functions are classified by whether they are deterministic, depend on off-chain facts, or depend on judgment.p.1
3. Naive automation can bundle partnership, lease and sale into one code module, so separate contract objects and separate customer acceptances are required.p.6
4. A digital signature cannot show that a customer understood the three separate undertakings in the arrangement.p.7
5. Arrears and asset events require human review states before the contract can resume.p.8
6. Shariah rules are held in a versioned parameter registry governed by the Shariah committee rather than in developer code.p.10
7. The Shariah risk of an automated product sits mainly in specification and oracle design, not in the ledger.p.11