Quantum Computing and Islamic Banking:

Legal Framework for Transforming Egypt's Financial Sector

Ahmed Mokhtar Elmansy

 

Abstract: Islamic banking in Egypt has experienced significant growth driven by the rising demand for Shari’ah-compliant financial products. However, the sector faces several challenges, including regulatory uncertainty, limited diversification into other products, and intense competition from conventional banks. This note argues that despite supportive legal frameworks, further development is needed in Egypt to ensure full compliance with Islamic law principles. The intersection of Islamic banking and quantum computing presents a transformative opportunity to address these challenges. Quantum computing offers significant potential to enhance efficiency, security, and innovation in Islamic banking by using quantum bits to perform complex calculations at unprecedented speeds. This capability is particularly relevant for complex financial modelling and encryption, both of which are crucial for maintaining compliance with Shari’ah law. The existence of a regulatory framework led by Egypt's Central Bank and Shari’ah authorities ensures adherence to Islamic principles. However, effective risk management and the implementation of sophisticated financial instruments, such as sukuk (bonds) and takaful (insurance), remain essential. As global finance becomes increasingly complex, innovation within Islamic banks must be fully aligned with Islamic law. This creates a strong incentive to integrate advanced technologies like quantum computing, which will streamline these processes and bolster the sector’s resilience.