Can you use the money earned in crypto to pay zakat?

Islamic Finance & Shariah
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2

Ooo very good question, I believe you do when the zakat year comes, you quickly check how much it is worth and pay the 2.5%, of course it changes every hour or so, but I’d say get the best or average and round it up. While writing this, I see the issue with paying money from the crypto money you have earned.

3

Do we consider what we are investing into as well? Let’s say we have some crypto and we are keeping it, that value changes every minute, so I am now wondering how feasible that is.

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My conclusion from it all is, that whatever assets you have that is tangible, and of value, that is what you have to pay zakat in.

5

I think there’s a few discussions at play here to break down this question

Firstly, why couldn’t you? Is an assumption being made that crypto is Haram and thus income from it is Haram and can’tbe used for Zakat?

6

I assume instead what was intended is whether crypto is Zakatable or not?

7

Also could someone clarify if the question means paying Zakat in actual crypto or only using profits from crypto (converted to cash or something else) and then paying that

8

V interesting. Maybe we could take a step back and mention how zakat works

9

We know zakat is compulsory but the percentage (2,5%) is owed on savings/wealth. If one is able to covert crypto into wealt, it would be clear case imo

10

I believe that the majority view on crypto is that you have to pay Zakah on the value of your crypto. Even if you don’t want to turn it into cash, you need to pay on its value

11

Oh ok I understand what you mean

12

So if the value of crypto just falls overnight, the amount that one would pay would fall accordingly

13

I presume if someone does not intend to resell the crypto, it does not impact its zakat applicability.

14

As long as the fund earned are from crypto backed by a tangible asset, then definitely.

15

Yeah, assets are factored into Zakat. We have a slightly different percentage on assets but I can’t remember exactly how much.

16

One just needs to pay on the value of the crypto on the due date of their Zakah. Regardless of the value the day before or the day after. E.g., let’s say your Zakah date is the 21st of September and your crypto on that day is worth £1000,

  • it doesn’t matter if on the 20th it was worth £1 and again on the 22nd it became £1 again. You still pay on the £1000

  • similar it doesn’t matter if on the 20th it was worth £1million. You still pay what it’s worth on the 21st which is £1000

17

Why do they not treat it like stocks?

18

That seems an odd ruling given. It’s very similar to stocks

19

Can you clarify in what sense?

20

Well on stocks we don’t pay 2.5% on the entire percentage we own.