Halal Metaverse: Beyond Shariah-Compliant Contracts

A halal metaverse has certain distinct features. Similar to any other metaverse, it is a shared virtual world. However, in the halal metaverse, all transactions must comply with Islamic legal and ethical norms (in addition to the country-specific financial regulations). At a fundamental level, similar to its physical or digital counterpart, the metaverse-residents must comply with all basic Shariah norms of contracting, such as the freedom from riba, and from excessive gharar in the form of complexity, interdependence in transactions, inaccuracy or inadequacy of information. In the halal metaverse, the use of immersive technologies that enable users to “experience and feel” as well as the use of blockchain or distributed ledger technology that permits the user to “own” and exchange value raise several additional Shariah concerns.

One, a halal metaverse is expected to be one that uses environment friendly or green technologies (1). The environment challenge is fully aligned with the goals (maqasid) of Shariah encapsulated as protection and nurturing of the posterity or nasl (2).

Two, the use of immersive technologies that allows a user to “experience and feel” and socially interact with others demands compliance with certain norms of social behaviour in the virtual world (3). In conformity with the objective of Shariah to protect the dignity of the individual (hifdh al-nafs) — especially of women — Islamic societies have always sought to ensure such social behaviour.

Three, the metaverse allows Islamic organizations to collect and use a wide range of data, including personal information, financial data, and behavioral data. This data could be used to personalize the customer experience, but it could also be used to track and monitor customers in ways that may violate their privacy. Further, Islamic organizations may be tempted to use data collected in the metaverse for purposes other than those for which it was intended, such as targeted advertising or manipulation of customer behavior. The ethical concerns related to data privacy and misuse are often not articulated clearly enough. On the possibility of sharing relevant information about the individual borrower (as in the credit-scoring model), one needs to be careful about a major Islamic ethical norm — the right of an individual to be protected against gheebah, buhtan and nameemah — that govern information-sharing.

• Gheebah means information-sharing about a Muslim who is neither present nor approving, even when the data is accurate.
• When data is inaccurate, sharing of information amounts to buhtan.
• Nameemah refers to disclosure of data that may hurt the interests of the concerned party or lead to conflicts with a third party.

Scholars assert that in view of the above norms, extreme caution should be exercised while sharing data and information about others in general. Information-sharing may be undertaken only under specific conditions, e.g. when this is certain to bring some benefit to a Muslim or ward off some harm. Shariah, however, provides a window of permissibility for sharing of personal data and information, when it can potentially impact decision relating to marriage, business etc. At the same time, the data and information shared should be the minimum that is required to address the problem at hand (4).

Four, the choice between centralization and decentralization is often confused with the possibility of exploitative behaviour of the regulator (government agency) highlighting the merits of anonymity. It is very important therefore, to avoid mixing up multiple issues.

• Though it remains largely like a scene from science fictions or highly popular digital games, some visionaries have predicted that the metaverse is going to be far more pervasive and powerful than anything else. If one central company gains control of this, they will become more powerful than any government, and be a god on Earth. Islam as a religion abhors any attempt by any actor to monopolize resources of this Earth. Muslims are particularly averse to the idea of a fiction-like world that is dominated by a single corporation that wants to own and control the servers and databases, where they could alter any information about anyone or anything, change the rules of the world, and can create infinite amount of money. A metaverse built on blockchain or using distributed ledger technologies (web 3.0) is able to address this concern.
• If we consider the original “bit coin” argument, the case in favour of decentralized technologies also assumes the regulator — a central sovereign agency — to be a bad actor causing inefficiencies and acting against societal interest. Shariah favours open and free markets. Regulation by a sovereign state agency would be deemed unnecessary, if all economic units act in a manner required by Shariah. This is an unrealistic scenario, however. An intervention by the regulator, a state agency is considered imperative where there is any deviation from the Shariah norms. The idea of zero-regulation is alien to Shariah. It mandates an overwhelmingly corrective role to the state and its agencies to bring the systems and markets to order.
• Anonymity too has no place in an Islamic economic and financial system, except in case of charity. Respecting privacy concerns could imply that adequate care is exercised about possible data breaches. Additionally, the dependence on and collection of personally identifiable information (PII) should be minimized. It does not however, permit anonymity, since every actor/ user should be made fully accountable for his/her actions, behavior and transactions inside the metaverse.

Five, the metaverse may create new forms of inequality by allowing Islamic organizations to reach a global audience, but only those with access to the necessary hardware and software will be able to participate. This could exacerbate existing inequalities and create new divides.

Six, the metaverse allows Islamic organizations to create immersive and interactive experiences, but it also opens the possibility for exploitation, such as by creating addictive experiences or manipulating customer behaviour for financial gain.

Overall, the ethical issues in the application of the metaverse by Islamic organizations are complex and multifaceted, and it will be important for Islamic organizations to carefully consider these issues as they develop and implement virtual experiences.