Indonesia’s top religious body has banned the use of cryptocurrencies under Sharia law. The resolution from the Indonesian Ulema Council, the country’s top Islamic scholar body, considers cryptocurrencies haram under Sharia law.
Asrorun Niam Soleh: Cryptocurrency is haram for Muslims
The Indonesian Ulema Council (MUI) has officially declared cryptocurrencies illegal. The decision was taken in the early hours of 11 November at the Ljtime Ulama Forum. Regarding the decision, MUI chief Asrorun Niam Soleh says the Council based the decision on several reasons:
There are three legal provisions from the determined negotiations. That is, the use of cryptocurrency as legal currency is haram as it is gharar (danger, chance or risk) and dharar (harm caused by an individual to others) and is against Law No. 7 of 2019 and BI Regulation No. 17.
In Islamic finance and in the context of cryptocurrencies, “gharar”, “dharar” and “qimar” means that cryptocurrencies inherently involve uncertainty or elements of risk, loss and speculation, all of which are prohibited under Sharia law. President Soleh added that cryptocurrencies do not conform to Islam, as they have no physical form, no real value, no exact amount, and property rights can be transferred to the buyer.
MUI’s decisions can be influential
MUI represents the top Islamic scholar and religious authority on Sharia compliance in Indonesia, home to the world’s largest Muslim population. While the council’s decisions or “fatwas” are not legally binding, they can deter Muslims from investing in cryptocurrencies and make local institutions reconsider their dealings with cryptocurrencies.
The compatibility of cryptocurrencies with Islamic teachings is still a hotly debated topic in the rest of the Islamic world. Many Islamic scholars view cryptocurrencies as “halal” or permissible under Sharia law, with some mosques even accepting Bitcoin donations. cryptocoin.com You can take a look at the crypto decisions of the Chinese government here.
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