Digital Currency and the Question of Trust: CBEX Trading in Nigeria from Islamic Economic Lens

Abstract

The digital revolution has reshaped financial systems globally, introducing cryptocurrencies and Central Bank Digital Currencies (CBDCs) as alternative instruments of transaction and investment. In Nigeria, this transformation has coincided with the proliferation of digital-based Ponzi schemes, notably the collapse of the CBEX (Crypto Binary Exchange) platform, raising ethical and regulatory concerns. This study examines the relationship between digital currency, Ponzi schemes, and economic trust in Nigeria from contemporary economic and Islamic ethical perspectives. It evaluates how unregulated digital investments undermine economic justice and Islamic economic values. Adopting a qualitative approach, the study analyzes the CBEX case as a representative example. Data were drawn from Islamic economic literature, media reports, and regulatory commentaries to assess the broader ethical and socio-economic implications. The findings indicate that while digital currencies present genuine economic opportunities, inadequate regulation and low financial literacy have facilitated fraudulent schemes. From an Islamic perspective, CBEX-like operations contravene fundamental principles including transparency (bayān), trustworthiness (amānah), and the prohibition of excessive uncertainty (gharar) and gambling (maysir). The study concludes that restoring economic trust requires stronger regulatory oversight, enhanced public financial education, and ethical reorientation. It recommends a balanced framework that supports digital financial innovation while embedding robust legal safeguards and Islamic ethical principles to prevent exploitation and ensure economic justice.