The Use of Smart Contracts in Islamic Banking and Its Impact on Performance Efficiency.

This literature review explores the role of smart contracts in Islamic banking, focusing on their impact onefficiency increase, risk reduction, cost savings, and customer satisfaction. With the increasing adoption of blockchaintechnology in financial services, smart contracts have emerged as a transformative tool that aligns with the principles ofIslamic finance. This study employs a quantitative research approach using survey data collected from financialprofessionals, customers, and banking stakeholders involved in Islamic banking. A structured questionnaire is distributedto gather perceptions regarding the use of smart contracts in Islamic banking and their impact on performanceefficiency. The results indicated that smart contracts significantly improve efficiency, reduce risk, lower costs, andenhance customer satisfaction in Islamic banking. Therefore, Islamic banking institutions should collaborate withregulatory authorities to develop guidelines that address the specific challenges of integrating blockchain and smartcontracts while ensuring compliance with Sharia law.