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The purpose of this study is to formulate a governance and regulatory framework for Islamic crypto assets (ICAs). A balanced regulatory framework is required to protect consumers and to encourage digital Islamic finance innovation.

This study focuses on Indonesia and compares it to other countries, specifically Malaysia and the UK, using statutory, comparative and conceptual research approaches.

The ICAs are permissible (halal) commodities/assets to be traded if they fulfil the standards as goods or commodities that can be traded with a sale and purchase contract (sil’ah) and have an underlying asset (backed by tangible assets such as gold). Islamic social finance activities such as zakat and Islamic microfinance activities such as halal industry are backed by ICAs. The regulatory framework needed to support ICAs includes the Islamic Financial Services Act, shariah supervisory boards, shariah governance standards and ICA exchanges.

This study only examined crypto assets (tokens as securities) and not cryptocurrencies. It used regulations in several countries with potential in Islamic finance development, such as Indonesia, Malaysia and the UK.

The ICA regulatory framework is helpful as an element of a comprehensive strategy to develop a lasting Islamic social finance ecosystem.

The development of crypto assets must be supported by a regulatory framework to protect consumers and encourage innovation in Islamic digital finance.

ICA has growth prospects; however, weak regulatory support and minimal oversight indicate weak legal protection for consumers and investors. Regulating ICA, optimising supervision, implementing shariah governance standards and having ICA exchanges can strengthen the Islamic economic ecosystem.