ABSTRACT Money has undergone numerous form changes throughout history, and as a replacement for the current system, it has started to take on a digital form. The most recent kind of money is a cryptocurrency, which was created decentralized from any central authority. The sectors in which bitcoins are used are expanding daily. One of the most popular cryptocurrencies in the world, Bitcoin was introduced in 2009, where it quickly gained popularity and dominated the cryptocurrency industry. In early 2018, the cryptocurrency market was worth more than $800 billion and now it worth more than $3 trillion. The majority of cryptocurrency users seek to benefit from rising cryptocurrency values. These actions, however, do not adhere to the principles of cryptocurrencies. In terms of Islamic law, cryptocurrencies also present issues with legitimacy for users who are Muslims (Fiqh). Despite the claims of many religious organisations and Islamic academics, some Islamic scholars believe that bitcoins are halal, while others believe as haram. Our study uses current literature and fatwas to conduct a multidimensional analysis of the legitimacy of cryptocurrencies in terms of hanafi fiqh .We also try to identify the characteristics of Islamic cryptocurrency. Keywords: Cryptocurrencies, Bitcoin, Islam, Islamic law, Hanafi Fiqh, Money.
FAQs
What is the Islamic perspective on cryptocurrency? ›
In the Muslim world, practicing Muslims do not invest in banking products that pay returns via interest. As a result, practicing Muslims do not consider Bitcoin, Ethereum, and other crypto currencies to be compliant with Islamic Shari-ah.
Is crypto haram in Islam hanafi? ›Here are key views on Cryptocurrency in Islam from Hanafi: Halal Perspective: Some scholars, including Mufti Muhammad Abu-Bakar and Mufti Faraz Adam, consider cryptocurrencies like Bitcoin permissible under Islamic Sharia rules due to their value, availability as a currency, and absence of interest (riba)[1][4].
Is it permissible to invest in cryptocurrency in Islam? ›Cryptocurrencies can involve gharar due to their high volatility. Additionally, if the way they are used or invested involves elements of interest, it would be contrary to Islamic teachings, as interest is prohibited in Islam. Speculation, which is common in the crypto market, is also discouraged.
What are the factors influencing adoption of cryptocurrency based transaction from an Islamic perspective? ›The result of the hypothesis testing indicates that “Behavioral Intention to Use Cryptocurrency from the Islamic perspective” is influenced directly by Shari'ah Compliance, Perceived Ease of Use, Emotionality, Perceived Usefulness, and Financial Concern.
Which cryptocurrency is halal? ›| Name | Ticker | Halal/ Haram Status |
|---|---|---|
| Cardano | ADA | Cardano: ADA is Halal |
| Cartesi | CTSI | Cartesi: CTSI is Halal |
| Casper | CSPR | Casper: CSPR is Halal |
| Celo | CELO | Celo: CELO is Halal |
Gold, along with other investment, such as stocks and sukuk, can help diversify an investor's portfolio. Is online gold trading halal in Islam? Trading gold is permissible (halal) in Islam, and it can be traded both online and offline.
How do I know if crypto is halal or haram? ›Conditions for Permissibility
For cryptocurrency trading to align with Shariah principles, it must adhere to specific guidelines outlined by Islamic finance experts. Transactions should avoid elements deemed haram (forbidden) in Islam, such as riba (interest), gharar (uncertainty), and maysir (gambling).
However, scholars on the other side of the debate argue crypto trading is Haram as it doesn't have intrinsic value and is not backed up by real, physical assets.
Is cryptocurrency halal or haram in Islamqa? ›It is permissible to deal in crypto currency, if the exchange takes place immediately and the transaction is free of any infractions of Islamic teachings, such as using financial leverages and dealing in differences, futures and so on.
Is Bitcoin haram mufti menk? ›What are Mufti Menk's views on investing in Bitcoin? Mufti Menk said, there is nothing haram about Forex or crypto.
Is crypto leveraging haram? ›
The answer depends on whether it aligns with Islamic finance principles. Leverage often involves interest (usury), which is prohibited in Islam, and the heightened risks and uncertainty (gharar) may lead many scholars to classify it as haram.
Which trading is halal in Islam? ›Investing in stocks of companies that operate in compliance with Islamic principles is generally considered halal. This involves selecting companies that avoid involvement in industries such as alcohol, gambling, and pork, aligning with ethical and Sharia-compliant business practices.
What is the position of cryptocurrency in Islam? ›Bitcoin and digital money are not included in the criteria mentioned in Islamic economy law because of it contains obscurity (jahalah), high speculation element, and can harm individual as well as the country. Bitcoin has no clear source, authentic balance, and it only has moral assurance.
What barriers limit the adoption of cryptocurrency? ›Cryptocurrency adoption. Risk is the most influential barrier for traditional investors. Government regulation is the most critical barrier for tech-savvy investors.
What is the asset behind cryptocurrency? ›What are Crypto Assets? Crypto assets are purely digital assets that use public ledgers over the internet to prove ownership. They use cryptography, peer-to-peer networks and a distributed ledger technology (DLT) – such as blockchain – to create, verify and secure transactions.
What is the Islamic ruling on crypto mining? ›Value Creation: Scholars like Mufti Muhammad Abu-Bakar and Mufti Faraz Adam view cryptocurrencies like Bitcoin as permissible due to their perceived value and availability as a currency. Absence of Interest: Cryptocurrencies operate without interest, aligning with Shariah law principles that prohibit riba (interest).
Is crypto future trading halal? ›The rapid evolution of financial markets, including crypto futures, has sparked debate within Islamic financial circles. In Islam, crypto futures trading is generally considered haram due to the high uncertainty (gharar) and speculative nature akin to gambling, both prohibited under Sharia law.