@ReeceByfield i recall reading an article recently and as you say some people liken it to gambling. So I guess one element of bitcoin would be how great the fluctuations are.
The second element which I recall conversation over was whether it’s actually linked to gold for example (and if it isn’t then it would seem like a pyramid scheme, meaning it’s value is driven totally by hype and it has not intrinsic value).
Alhamdulillah I managed to do some extensive research into the opinions of various councils, institutes and Muftis. I’ll send a summary of those who said Halal then those who said Haram
Mufti Muhammad Abu-Bakar - SilkBank Ltd
Verdict: Halal
Why:
Store of value that people accept and is legal
Warns about volatility
On crypto being speculative, he argues all currencies have a speculative element - this doesn’t make them Haram
“In general terms, the use of something lawful for an unlawful purpose does not make the thing itself unlawful.”
Dr Zoyaad Mohamed - Sharia Committee Chairman of HSBC Amanah Malaysia
Verdict: Halal
Why:
Sharia doesn’t demand currencies to have an intrinsic value - if it did then FIAT currencies wouldn’t have replaced Dirhams and Dinar in gold and silver
Social consensus is what is required to establish currency for transactions
Does warn about volatility and speculative element
Mufti Faraz Adam
Verdict: Halal
Why: Fulfil the definition of Maal
Turkish Government - Directorate of Religious Affairs, Dinayet
Verdict: Haram
Why: “The purchase and selling of digital currencies is not appropriate according to religion at this point due to the fact that they are open to speculation in terms of value and they can easily be used mostly in illegal deeds such as money laundering. They are also far from state auditing and supervision,”
Shaykh Haitham al-Haddad
Verdict: Haram
Why:
Not a currency because no intrinsic value
Also believes FIAT currencies not real (due to delinking from gold in 1971 Bretton Woods agreement)
Bitcoin or any other digital currencies are just imaginary currencies. They does not exhibit the fundamental qualities and conditions of real currencies, at all. And these days the trade adopted with such currencies over the internet and web applications, does not really involve any mabie‘ (actual buying and selling), neither does it fulfill the basic Shar‘ai conditions for the provision of bay‘. Instead, in reality, it is a form of interest and gambling which is based on an ambiguous transaction and fraud. Therefore, the businesses running in form of buying and selling of bitcoins or any digital currencies on the internet are not Halal (i.e. impermissible) in light of the Islamic Shari‘ah and it is also impermissible to invest money in them. (Extracted from: Darul-Ifta Darululoom Deoband, Fatwa#: 155068 and 155275, October 12th 2017 & Jamia Uloom Islamiyah Binnori Town Karachi, Rajab al-Murajjab, 1438 Hijri)
Mufti Taqi Uthmani
Verdict: Haram
“… in addition to the fact that the currencies are originally a medium of exchange and should only be exchanged for personal use in different countries. To make them a tradable commodity only for earning a profit is also against the basic philosophy of Islamic economics.”
It is said he investigated the details of this matter for 6 months before arriving at the conclusion
Shaykh Sulayman ar Ruhayli, perhaps had the most stinging criticism. He stated “It [Bitcoin] has no value in and of itself. It has no economic strength that gives it value, nor an origin of some sort that it returns (like gold or silver). Rather, its value is based on the fluctuation of the market.” He also made similar arguments regarding the fact it has not been adopted by any legitimate government entity. After concluding it was not permissible, he went further stating, “investing money in it is a waste of wealth. It is like a bubble…it may burst at anytime, and of a surety it will burst.”
I don’t see how it would be considered gambling. Like any currency or stock, it can go up or down. Granted, crypto is volatile, but venture capital can have even greater risks.
What is internal is that none of these scholars have criticised crypto on issues like the feather coin scandal. Teather coin is meant to be back by USD, however, it wasn’t always, and thus there was massive market manipulation since other coins were often linked to Teather coin.
Yeah I would agree that as long as someone believes in a coin as something that will increase in value and then decides to purchase and hold that asset expecting capital appreciation then it’s not gambling.
Though perhaps if someone is actively trading a set of coins that they don’t even understand and just speculating on ups and downs then it could be considered gambling
Another issue scholars haven’t mentioned is crypto whales. Billionaires pour tons of money into crypto coins sparking a peak in the value of the coin. As the coin raises in value they pull out causing a massive crash while all the naive investors lose out.
What are the arguments for Halal? @Khalil I have seen arguments for it to be halal and I am convinced otherwise. However I don’t have my notes with me unfortunately.
I agree with the halal ones, We can literally use it as money nowadays, I heard amazon will soon accept bitcoin as a payment method. If this is true, it will literally have value!
This is YQ claiming it is halal and his reasoning sounds quite compelling. I would suggest you all watch it.
Essentially, my argument would be that crypto is Halal in general. It is like in general, how all foods are halal but there are haram foods out there that we stay away from, it same as bitcoin, generally, it is halal but what you invest can become halal. However, we can argue that there is more haram bitcoin than it is halal. So we need to be conscious of what cryptos we are investing in.
Oh I see, I didn’t see that. Yh I have made my decision based on that too, the arguments were very strong and compelling and made sense. I am, for now, leaning on his side. However, I can one day be convinced that the world is moving towards crypto, it will be inevitable one day that it will become halal for those that think is haram. Allah guide us!
