Is Bitcoin Halal or Haram? Sharia Perspective on Cryptocurrencies

Bittime - In recent years, the popularity of cryptocurrencies, especially Bitcoin, has increased significantly in various parts of the world. However, in the midst of its rapid development, an important question arises among Muslims: Is Bitcoin in accordance with sharia principles, or does its existence conflict with Islamic law? This article discusses various views of scholars regarding the status of Bitcoin from a sharia perspective.

Variations in Views among Ulama

Until now, no consensus has been reached among scholars regarding the legal status of Bitcoin. Some scholars consider Bitcoin halal, while others state that Bitcoin is haram or even makruh. These diverse opinions reflect the complexity and speculative nature of this technology, as well as varying interpretations of applying sharia principles to a new phenomenon such as cryptocurrencies.

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Scholars Who Consider Bitcoin Halal

Some scholars see Bitcoin as a form of asset or currency that can be used in accordance with sharia principles. Dr. Mohd Daud Bakar, for example, classifies Bitcoin as an asset and states that its use is permissible as long as it does not involve activities prohibited by sharia. A similar opinion was also expressed by Dr. Mohamed Ali El Gari, who views Bitcoin as an acceptable currency in everyday transactions, as long as it is done with caution.

Mufti Muhammad Abu Bakar also stated that Bitcoin can be considered halal, as long as its use is in accordance with Islamic principles. Mufti Faraz Adam, in his analysis, explained that Bitcoin meets the criteria for "mal" (treasure) in Islamic law because it has economic value, can be stored, and used for legitimate transactions. However, he emphasized the importance of regulation and transparency to ensure its use remains within the sharia framework.

Scholars Who Consider Bitcoin Haram

On the other hand, a number of scholars state that Bitcoin is haram for various reasons. Egypt's Grand Mufti, Mufti Shawqi Allam, issued a fatwa stating that Bitcoin is not permitted in sharia due to its high volatility, speculative nature, and potential misuse in illegal activities such as money laundering and tax evasion.

Sheikh Assim Al Hakeem also stated that Bitcoin is haram because it has no backing from government authorities or physical assets. He added that Bitcoin is often used in speculation and criminal activities. 

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A similar opinion was expressed by Shaykh Haitham al-Haddad, who highlighted the volatility of Bitcoin prices and the fact that this currency has no intrinsic value or government backing, so it is considered to be contrary to sharia economic principles.

Moderate Approach: Bitcoin As Makruh

Some scholars take a more moderate approach to Bitcoin. Dr. Salah Al Sawy, for example, considers Bitcoin to be something evil. He did not find a clear argument to declare Bitcoin haram, but stressed it 

that its use is very risky and full of uncertainty. He advised Muslims to be careful and consider carefully before getting involved in Bitcoin-related activities.

Conclusion

The differences in views among scholars regarding the legal status of Bitcoin reflect the new challenges presented by cryptocurrencies in the context of Islamic law. Some scholars see it as a legitimate investment opportunity, while others consider it a high-risk activity prone to abuse and instability.

For Muslims who are considering using or investing in Bitcoin, it is recommended to deepen their understanding of the risks and benefits. Consulting with competent scholars or experts in this field is also highly recommended so that decisions taken remain in accordance with sharia principles. Ultimately, the decision is in the hands of the individual based on their beliefs and deep understanding of Islamic law.

FAQ about Bitcoin in an Islamic Perspective

Is Bitcoin Halal?

There is no consensus yet. Some scholars consider it halal if used in accordance with sharia, while others declare it haram due to its speculative nature, high volatility, and potential for abuse.

Why is Bitcoin considered haram by some scholars?

Bitcoin is considered haram by some scholars because it is not supported by official authorities, has no intrinsic value, is susceptible to illegal activity, and is a high risk investment.

Are There Moderate Opinions on Bitcoin?

Yes, some scholars, such as Dr. Al Sawy is wrong, considering Bitcoin to be makruh. They do not declare it haram, but advise caution due to the inherent risks and uncertainties.

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Reference

Islam and Bitcoin, Is Bitcoin Halal? 10 Scholars’ Opinion on Bitcoin., accessed December 29, 2024.

Author: MF