Cryptocurrency is a platform that uses blockchain technology for digital payments and digital currency exchange. Technology has brought a revolution to the digital world. Many times, payments were following the mainstream method. Cryptocurrency is the breakthrough that everyone needs; for business and personal use.
There are more than 2000 cryptocurrencies in the market, but bitcoin is still the first and most known. The question is whether cryptocurrency is halal or haram in the eyes of Allah and follows the Shariah principles. The speculations favor haram as cryptocurrency can ease the money laundering process.
Let’s discuss the question in detail.
1. Shariah Review
Shariah laws are the laws made per the rules and teachings of the Quran and the lessons of the Prophet PBUH. The graph of cryptocurrency around the world is constantly going upward. Muslims are fourth of the total population, and there is uncertainty among the Muslims about whether the technology is haram or halal.
All the segments dealing with money stick to Shariah law, including the Islamic mortgage. Experts believe that blockchain will change each zone of the budgetary framework. Though it is not decided whether it is haram, Muslims worldwide are using it.
2. Debate Among Scholars
Cryptocurrency has changed the lives of many people. As Muslims are many, companies are doing every bit to prove that cryptocurrency is halal.
The companies are introducing instruments that are physical and acceptable for Muslim scholars. Gold is one of the earliest forms of money, so people compare cryptocurrency with gold to prove it is halal for Muslims.
A good way is to go to the Islamic finder app and read the translation of the Quran; it will give you an idea of whether dealing with this technology is permissible in Islam or not.
3. Law Committees
A recent report says that only 20-30 percent of the banking in the Gulf and Asia follows Islamic principles. Most Muslims follow conventional finance if it offers high returns.
The issue of dealing with cryptocurrencies is uncertain, and whether the institutions of Islamic funding can deal in cryptocurrency or not. None of the authorities have banned the dealing of cryptocurrencies because they don’t want to lose the chance to benefit them and the Muslims from the technology.
Most Muslim banks have warned Muslims about the instabilities of this currency, but there is no final word on banning it. Many law committees are in favor of bitcoin as it is socially acceptable across the globe.
Because more than 2000 currencies are available, and all of them have different features, it is unfair to ban them. The high number of currencies has increased the uncertainty among Muslims.
4. What Every Day Muslim Believes?
Let us talk about what every day Muslims believe and see if it aligns with the sayings of the scholars. A blogger says that the haram or halal depends on what you believe because nothing is mentioned in the Quran.
The fact that it is not gambling and has no interest makes it a legitimate business. Moreover, the blogger believes it is the future and vital for any economy.
Another Muslim state that there are five points to decide whether a thing is permissible in Islam or not.
- Anything that has weight cannot be rented out.
- Anything that doesn’t have weight can be rented out.
- No currency can be rented out.
- If the money generation source is hidden, then it’s prohibited.
- Any business without any loss is not permitted.
As the source of money generation is hidden, it does not hold enough credibility to be considered halal.
Lastly, another Muslim believes cryptocurrency is not permissible as it follows the basic guidelines. The point where the uncertainty comes from is that it is somehow related to gambling, which means there is so much instability.
5. Commercial Value
There is a point of consideration in determining whether this currency is halal or haram and that there should be Mal. Mal refers to the possession; when it comes to this factor, cryptocurrency is halal as it can be possessed and has commercial value.
Therefore, we can say that as long as there is no illegal activity with your currency; you are keeping what you paid for, then it meets the basic requirements of the shariah.
● Currency Ownership
Currency ownership is with the person who has bought the coins and is kept in an e-wallet. An owner can put his coins in the trading when he thinks it is the right investment time.
● Shacklewell Lane Mosque
The mosque is situated in the UK, and it became the first mosque to accept cryptocurrency as zakat and donations in 2018. This means it has accepted cryptocurrency as halal and falls under Islamic law.
Another problem in determining whether cryptocurrency is halal or haram is that Muslim scholars cannot understand the complexity of digital currency.
From where we see it, Islamic scholars consider cryptocurrency as a form of Mal, making it halal. There is no final verdict on the issue, but the circumstances lead to the acceptance of digital currency.
The need of the hour is to arrange seminars for the scholars to understand how the currency works fully and everything about it. Only after getting complete knowledge can they give any verdict.
If the currency gets accepted, people who have it will have to pay zakat on it. This would be a big problem as many Muslims have large reserves of this currency.
Digital currency is certainly the future, and every economy will need this currency to get stable. Whether the currency is halal or not needs to be answered as soon as possible because many Muslims are reluctant to invest because of the uncertainty.
The scholars need to study the currency in detail so they can understand the complexity and answer the question accordingly. At the moment, it seems that the answer will favor halal as it follows the basic rules of Islamic law and shariah.