Cryptocurrency: Halal or Haram?
An ongoing debate against Islamic scholars had been circulating around the media to determine whether Bitcoins are Halal (Sharia Compliant/ acceptable under the Islamic law) or Haram (forbidden under the Islamic Law). Bitcoins are known to be under probation under the Islamic finance industry.
How can we determine if Bitcoins are Sharia Compliant? It should pass under some requirements which include the exclusion of investments which derive a majority of their income from the sale of alcohol, pork products, pornography, gambling, military equipment or weapons. The law most importantly prohibits “riba or usury”, defined as interest on all loans of money.
Now how can we classify bitcoin as? Is it considered as currency or a commodity? In the context of Islam, there should be a solid currency to be specified that a bitcoin must have intrinsic value; given the fact that a value of a product is dependent on its usage. Just like how gold, silver, wheat and etc. are used as monetary assets back then; the value of the item is embedded on the object itself. However, Bitcoins do not possess any of these, making it baseless to be considered as currency. On the contrary, Bitcoins can and are being used as a commodity like a product or a company share.
To find out the answer, there are two concepts in Islam that first need to be considered. First, theventure ought to be made totally in business shares or money. Second, there ought to be some solid business or work occurring behind that offer or cash. All currencies are being created and a few contracts are being done behind the scene. In view of that, value increases or decreases.
Bottom line is that Bitcoin itself isn’t Haram in any way. It has an intrinsic value, it’s mineable, rare, acknowledged as payment medium and isn’t upheld by any intrigue based instruments. As it were, the ‘digital cash’ philosophy and use of cryptocurrency are halal, while purchasing and ‘hodling’ Bitcoin as a venture may not be. Ever since the report was published on multimedia platforms, at least one mosque has followed suit and declared Bitcoin as halal.
At the end of the day, the final verdict of whether who gets to decide if Bitcoins are Halal or Haram is your own personal perspective and ethical evaluation. Henceforth, at FIAT exchange we’ll guarantee you a more inclusive financial future to help guide you on your investments.
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