Ijtihad is the process of independent legal reasoning exercised by a qualified scholar (mujtahid) to derive Islamic rulings on issues not explicitly and unambiguously addressed in the Quran or Sunnah. It is a fundamental mechanism in Islamic jurisprudence that allows the legal tradition to address new situations and contemporary issues.
In the context of modern Islamic finance, ijtihad is particularly relevant for issues like cryptocurrency, digital assets, modern insurance products, and complex financial instruments — topics that did not exist in classical scholarship. Scholars apply ijtihad by examining the underlying principles (maqasid) of Islamic law and analogical reasoning (qiyas) to evaluate new financial products.
The exercise of ijtihad is restricted to scholars who meet specific qualifications, including deep knowledge of Arabic, the Quran, Hadith, and established jurisprudential principles. The diversity of qualified opinions on contemporary issues reflects the richness of ijtihad and is a feature, not a flaw, of the Islamic legal tradition.