According to a report by CNBC Indonesia, Tajdid, Chairman of the Tarjih Council and Mohammediyah Central Executive Committee, has issued a new fatwa against the use of cryptocurrencies, declaring it haram or illegal for Muslims. For details cryptocoin.com keep reading.
Will the fatwa block cryptocurrency transactions in Indonesia?
In the statement, attention is drawn to two issues as the reason for the ban. First, it is stated that digital assets such as Bitcoin are speculative and highly volatile in nature. Additionally, it is stated that cryptocurrencies are not based on other assets such as gold and are “uncertain”, therefore cryptocurrencies are haram according to Islamic law. Second, the fatwa states that digital currencies do not comply with Sharia principles for barter system or medium of exchange laws to be legal money and require approval by the government or, in this case, the central bank.
While the Tarjih Muhammadiyah is one of the largest non-governmental Islamic organizations in the country, fatwas are not generally treated as binding rulings. However, this isn’t the first time an Islamic organization has labeled cryptocurrencies ‘haram’ in Indonesia, meaning a ban. In November, Islamic scholars declared that all digital asset trading is prohibited for Muslims. The National Ulema Council (MUI) referred to elements such as uncertainty, betting and loss in crypto assets. Decisions made by Islamic authorities are not official laws and do not directly prohibit crypto trading. But the far-reaching consequences of this in a country that is home to the largest Muslim population cannot be completely ignored.
Meanwhile, crypto giant Binance is in talks with some of Indonesia’s biggest companies to launch a crypto initiative in the country. The CZ-led exchange has also partnered with a consortium led by Indonesia-backed MDI Ventures to expand the blockchain ecosystem in the country by establishing a new digital asset trading platform. Despite initial reluctance, cryptocurrencies were legalized in September 2018. The Indonesian Ministry of Commerce has approved the trading of crypto assets as commodities.
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