Are Cryptocurrencies Halal Now?
According to a recent fatwa of an Islamic scholar named Muhammad Abu-Bakar, crypto-currencies are “halal” and can be used by Muslims. Many sources such as Independent website (1) claim that this fatwa will open the crypto markets to 1.6 billion Muslims worldwide. In fact, the same sources think that Bitcoin’s recent dramatic price gain is because of this: The Muslims started to buy Bitcoin after learning that it is halal and raised the price of Bitcoin.
Unfortunately, this assumption does not reflect the truth. First of all, this fatwa reflects the opinion of a single scholar who is paid by a company called “Blossom Finance” in Indonesia. Islam does not have a single holy authority like the Pope. There are literally thousands of scholars and thousands of different opinions. Moreover, the majority of them still think that crypto-currencies are “haram” under Sharia law. For example, scholars in Turkey recently declared that using crypto-currencies is a sin and a punishable offense (2). The main reason why the majority of scholars think that crypto-currencies are haram is the “anonymity” feature. It seems being anonymous will lead people into doing some “bad” activities according to scholars and since they cannot be audited by the governments, there is no way to track these activities. Therefore, they are haram.
How This Will Affect 1.6 Billion Muslims?
Actually, the fatwa of a single scholar who is paid by a finance company won’t affect 1.6 billion Muslims at all. In addition, Muslims do not need a fatwa to buy and sell crypto-currencies. They are already doing it: Ironically, Indonesia, the country where Blossom Finance is located, is the 11th country in the world that changes its national currency with Bitcoin (3). Same goes for Turkey, it is the 9th country. United Arab Emirates Exchange already invested in two blockchain companies and there are lots of crypto start-ups in Dubai (4). In other words, Muslims already use and like crypto-currencies and the opinions of Islamic scholars won’t change this fact.
However, online gambling is a different kind of beast. Even if all the Islamic scholars in the world declare crypto-currencies as “halal”, Muslims still won’t be able to gamble with them. Gambling is a very serious offense in İslamic countries and punishable by jail time (5). So, to sum it up, Muslims already use crypto-currencies for trade purposes and they will continue doing so, but online gambling is still off the limits.
(5) According to UAE Penal Code, gamblers are punished with a prison sentence of 2 years and a fine of Dh20,000.