Bitcoin operates through cryptography and is a decentralized cryptocurrency, not requiring central banks or any form of regulations. This relatively new form of money and investment has attracted the focus of so many people across the world, and people of the Muslim faith are no exception.
AI Generated image of Bitcoin
Shariah Perspective on Bitcoin
Dr. Shaykh Yasir Qadhi, in this video, explores all the basic tenets of Islamic finance to be able to assess if at all Bitcoin is or may be considered as halal. This includes but is not limited to the prohibition of riba (usury), gharar (excessive uncertainty), and investing one's money in haram (forbidden) industries. Principally, nature does not contravene these principles; as stated, the matter of nature does not include any interest-bearing transactions, since the value and use are relatively transparent. Therefore, it is quite open and can be used such that they will not take part in haram activities.
The Concept of Currency in Islam For something to be categorized as money in the halal category, it should be widely accepted and of intrinsic value. Traditional currencies are valuable in terms of being under the aegis of government, but Bitcoin has a kind of value only due to its limited supply, just like the demand among its users.
Dr. Shaykh Yasir Qadhi observes that the acceptability may vary under such a basis for value, but there would seem an emerging consensus that wide use and acceptance of Bitcoin would be acceptable and justify itself as a form of money under Islamic law.
Most importantly, one of the key areas of concern is its speculative nature, which is most likely to take the shape of gambling (maysir), if the deal is dealt with the intention to earn fast profits by the virtue of the market being a volatile one. However, these can be deemed halal investments if put into use with due diligence, an understanding of the technology, and long-term intentions. This all is a matter of approach of the investor, and speculative behavior adding to the instability of the financial system has to be avoided at all costs.
Summing it up, though Bitcoin and other forms of cryptocurrency seem to uniquely challenge Islamic finance, interpretations such as that of Dr. Shaykh Yasir Qadhi's very carefully optimistic attitude towards them do seem to be coming out with due caution. If the Muslims carry out any dealings with cryptocurrencies using the rules of Sharia finance—abstaining from gambling and using the earnings for the sole purpose of benefiting other people in a positive way—then Bitcoin will be permissible for them. This, however, like any other new technology and financial instrument, requires constant review and advice by credible Islamic scholars, stakeholders, regulators, and its practitioners to assure it remains compliant with Islamic sharia.
Comments