DIGITAL-FIRST ISLAMIC FINANCE AS A LEAPFROG STRATEGY FOR EMERGING MARKETS: THE CASE OF UZBEKISTAN

Abstract

Many emerging markets with large Muslim populations exhibit a structural lag in Islamic financial inclusion, a gap traditionally closed through decades of branch-based expansion. This thesis argues that the digital era enables a different and faster path. Drawing on the mobile-money leapfrogging literature and on Uzbekistan's rare combination of strong latent demand for Islamic finance and advanced digital readiness, it contends that Uzbekistan can build its Islamic finance segment on a digital-first basis from the outset, bypassing intermediate stages rather than replicating them. The 2026 law on Islamic banking activity and the regulatory sandbox supply the enabling conditions, while global trends in Islamic fintech, tokenisation and artificial intelligence supply the instruments. The principal constraint is the nascency of digital-specific Sharia governance, which the article identifies as the priority for policy.