Explanation of Bitcoin Halal or Haram: What MUI Says and the Laws of Investment and Trading!

Bittime - Cryptocurrencies , especially Bitcoin (BTC), have become a hot topic among Muslim investors. With the increasing popularity of this digital asset, many are wondering, “Is Bitcoin Halal or Haram?” This question is becoming increasingly relevant as many countries with high Muslim populations, such as the United Arab Emirates and Turkey, show significant levels of crypto ownership.

However, the halal status of Bitcoin is still a matter of debate among scholars, with some considering it haram and others supporting it as halal for investment.

In this context, the Indonesian Ulema Council (MUI) has issued a fatwa regarding the law of cryptocurrencies. According to MUI, the use of cryptocurrency as a currency is haram because it contains elements of gharar (uncertainty) and dharar (loss).

However, MUI also states that cryptocurrency can be considered halal if it meets certain requirements as a commodity or digital asset that has clear value and benefits. This shows that the halal status of Bitcoin is highly dependent on the way and purpose of its use.

Also read: Everything that Happened to Bitcoin Throughout 2024: BTC ETF, Trump, and the All-Time High

Sharia Law and Bitcoin

To understand whether Bitcoin is halal for investment, it is important to look at the principles of sharia law that govern financial transactions. Shariah law prohibits riba (interest), gharar (uncertainty), and maysir (gambling).

Bitcoin, as a digital asset, has no interest in its transactions, and if it is used for storage of value or as a legal tender, it can be considered compliant with sharia principles. However, if Bitcoin is used in speculative and high-risk trading, then its status may become haram.

Based on the views of some Islamic scholars, Bitcoin can be considered halal if it is used in a way that does not violate sharia principles.

For example, if Bitcoin is used for long-term investment or as a legal tender, this is acceptable. However, Bitcoin trading that involves high speculation and extreme price fluctuations may be considered haram.

MUI Opinion on Bitcoin

The MUI, in the 7th Ijtima of Ulama of the Fatwa Commission, agreed that the use of cryptocurrency as a currency is haram. They emphasized that cryptocurrencies do not qualify as sil'ah (tradable goods) because they have no physical form and no definite value.

However, MUI also stated that if cryptocurrency has underlying assets and clear benefits, then it is legal to trade.

Thus, Bitcoin can be considered halal for investment if it meets certain criteria, such as having a clear value and not being used for excessive speculation. This suggests that Muslim investors need to be careful in choosing how they invest in Bitcoin and other digital assets.

Also read: Swiss National Bank to Adopt Bitcoin (BTC) as State Reserve Asset?

Conclusion: Bitcoin Halal for Investment?

Overall, the halal status of Bitcoin largely depends on how it is used. If it is used as a store of value or for investments that do not involve usury and speculation, then Bitcoin can be considered halal.

However, the speculative and high-risk nature of Bitcoin trading can make it haram. Therefore, it is important for Muslim investors to understand Shariah principles and consult with Islamic scholars or authorized institutions before making investments in Bitcoin or other digital assets.

With a cautious approach and the right knowledge, investors can make decisions that are in line with their beliefs.

FAQ

Is Bitcoin Halal for Investment?

Bitcoin can be considered halal for investment if it is used as a store of value or for long-term investments that do not involve usury and excessive speculation. However, its use in speculative trading may make it haram.

What does the MUI think about Bitcoin?

The Indonesian Ulema Council (MUI) stated that the use of cryptocurrency as a currency is haram because it contains elements of gharar (uncertainty) and dharar (loss). However, if the cryptocurrency has underlying assets and clear benefits, then it is legal to trade.

Why are there differences of opinion among scholars about Bitcoin?

The difference of opinion among scholars regarding the halal status of Bitcoin is due to different interpretations of the nature and use of cryptocurrencies. Some scholars consider it haram due to the potential for speculation, while others support it as halal if it is used in a way that complies with sharia principles.

How to Buy Crypto on Bittime

Want to trade sell buy Bitcoins and crypto investment easily? Bittime is here to help! As an Indonesian crypto exchange officially registered with Bappebti, Bittime ensures every transaction is safe and fast.

Start with registration and identity verification, then make a minimum deposit of IDR 10,000. After that, you can immediately buy your favorite digital assets!

Check the exchange rate BTC to IDR, ETH to IDR, SOL to IDR and other crypto assets to find out today's crypto market trends in real-time on Bittime.

Also, visit the Bittime Blog for interesting updates and educational information about the crypto world. Find reliable articles about Web3, blockchain technology, and digital asset investment tips designed to enrich your crypto knowledge.

Reference

mui.or.id, Is Bitcoin Haram? Pay attention to 3 MUI Legal Provisions, accessed on January 2, 2025.

learn.bybit.com, Is Crypto Halal, or Haram? What Muslim Investors Need to Know, accessed on January 2, 2025.

Author: AWW