Islamic Scholars View on Crypto
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Hello Inspired Halal Traders,
Today we will be talking about an important topic which is: Is Crypto Halal or Haram?
Below I have shared Perspectives on Cryptocurrency's Status
Scholars Who Consider Cryptocurrency Halal
The question of whether cryptocurrencies, like Bitcoin, align with Islamic finance principles, has sparked discussion among scholars and religious authorities.
Mufti Muhammad Abu-Bakar’s Analysis
Mufti Abu-Bakar conducted a detailed examination of whether Bitcoin complies with Sharia law, ultimately concluding that it is permissible.
He emphasizes Bitcoin's perceived value, its availability on currency exchanges, and its increasing acceptance as a medium of payment. However, he advises caution, recognizing the volatility of cryptocurrency markets and associated risks.
Source: Shariah Analysis of Bitcoin, Cryptocurrency & Blockchain
Mufti Faraz Adam’s Perspective
Mufti Adam provides a perspective on the permissibility of cryptocurrencies, arguing that they can be considered legitimate digital assets and mediums of exchange.
He highlights their legal utility and potential to evolve into universal currencies in the future, despite current limitations.
Source 1: My Thoughts on Crypto Assets
Source 2: Shariah Interpretations of Bitcoin
Shaykh Joe Bradford’s Insights
Shaykh Joe Bradford argues that there is nothing inherently impermissible with Bitcoin and cryptocurrencies at large. He emphasizes that their permissibility or impermissibility depends on how they are used, urging adherence to Islamic principles governing currency exchange. Additionally, he warns against overlooking the rules of Riba (interest) in cryptocurrency transactions and advises individuals to refrain from trading in cryptocurrencies without sufficient knowledge.
Source: Shaykh Joe Bradford on Bitcoin, Cryptocurrency, and Islamic Law
South African Scholar Perspective
Many South African scholars, including Mufti Radha ul-Haqq and Shaykh Taha Karaan, have deemed cryptocurrency permissible. They argue that irrespective of regulation, these currencies have been accepted through social norms. The fatwa-issuing body of the well-known Islamic seminary, Darul Uloom Zakariyya, argues that these cryptocurrencies, namely Bitcoin, can be considered as maal from a Sharia perspective and are hence permissible.
Source: Crypto Mania: The Shariah Verdicts
In essence, these scholars and religious authorities offer perspectives on the permissibility of cryptocurrencies within Islamic finance, highlighting the importance of understanding the ethical and legal implications of engaging with cryptocurrencies and recognizing their potential as legitimate financial instruments within Islamic principles.
Scholars Who Consider Cryptocurrency Haram
Shaykh Shawki Allam, Grand Mufti of Egypt
The Grand Mufti of Egypt, Shaykh Shawki Allam, declared Bitcoin as haram. He cited several reasons for this ruling, including the high degree of uncertainty, risk of fraudulence, lack of systemic control or rule mechanism, and the untraceable nature of the cryptocurrency, which makes it susceptible to use by criminal elements.
Perspectives from Mufti Taqi Usmani
Mufti Taqi Usmani, a prominent Pakistani mufti and Islamic finance expert, generally holds a view against cryptocurrency due to its speculative nature. However, he leaves open a door for his view to change in the future, particularly regarding Sharia-compliant coins.
Turkish Government’s Religious Wing
The religious wing of the Turkish government issued a similar edict declaring Bitcoin as haram.
They cited excessive uncertainty and the potential for abuse by criminal elements as the basis for their ruling.
Shaykh Haitham al-Haddad
Shaykh Haitham al-Haddad also considers Bitcoin impermissible, arguing that it lacks any real value and is not backed by any authority or stability. He compares Bitcoin to mainstream fiat currencies, stating that both lack inherent value. However, he notes that fiat currencies have an established authority to back them up, unlike cryptocurrencies. He leaves open the potential for a directly gold-backed cryptocurrency to be considered halal.
In discussions about whether cryptocurrency is allowed in Islamic finance, some scholars say it's okay (halal), while others say it's not allowed (haram). Those who say it's okay believe that cryptocurrencies could be used for trading like regular money, but those who disagree worry about risks and its connection to criminal activities. To figure out what's best, it's important to do research and understand how cryptocurrency works.
Join our discord where we steer clear of haram projects!
To your halal crypto success,
Zain from Team Inspired Analyst
-Signing off!
Disclaimer: The content in this newsletter is for educational purposes only and should not be considered financial advice. Cryptocurrency trading involves risk, and past performance is not indicative of future results. Before making any financial decisions, conduct your research and consult with a qualified financial advisor. Use the content at your own discretion and risk. This is not financial advice. This information regarding Islamic scholars' views on cryptocurrency is for general knowledge only. It is not a substitute for seeking guidance from a qualified Islamic financial advisor who can assess your specific circumstances. Ultimately, the decision of whether or not to invest in cryptocurrency is a personal one, and Allah (SWT) knows best.