Application of Blockchain and Language Models to Asset-Backed Islamic Financial Models: Use Cases, Instruments and Integration

Asset-backed Islamic financial models rest on risk-sharing (mudarabah, musharakah), genuine ownership of real assets (ijarah, salam, istisna, asset-backed sukuk), and the prohibitions of riba, excessive gharar and maysir. Technology can strengthen these models when it improves traceability of ownership, automates compliant disbursement, widens retail access to fractional claims on real assets, and supports scalable screening and documentation review. This paper examines the application of distributed-ledger technology (blockchain and smart contracts) and large language models (LLMs) to these structures. It surveys use cases, identifies instruments in use or under development globally, and notes constraints of Shariah substance, oracle reliability and human oversight. The paper is a working synthesis for learners and policymakers. It is not a fatwa and does not represent the position of any government or institution. Tokenisation does not by itself confer Shariah compliance; the underlying contract, ownership transfer and risk allocation remain decisive. KSCCN paper (KSCCN-PAP-TECH-ISF-2026-10), Series on Critical AI, Digital Sovereignty and Economic Diplomacy, 11 October 2026. Dr. Syed Muntasir Mamun, ORCID 0000-0001-6845-2853. The views expressed are those of the author.