Is Bitcoin Permissible In Islam?
First let's get some misconceptions out of the way. No. BitCoin mining is a cryptographic process that has a finite, well defined and deterministic. It does require a lot of computational power, but there is no luck involved. If it was luck based, then there would be a chance (however small) for your tiny ARM processor to find a BitCoin every now and then. That's not true. Yes they do. As you've noted, mining BitCoin requires a lot of computational power and that of course includes the infrastructure behind it (equipment, time, electricity ... etc). That alone gives it value. Also, the fact that people are willingto buy it gives it value. Think of diamonds. They definitely have value. It's not because they are rare (diamonds are much more prevalent than people are lead to believe), but because the market gives it value. The laws of Islam require halal currency to have intrinsic value, and digital currency seems to fit that bill perfectly. Unlike fiat currency, which is represented by a paper medium susceptible to damage, loss, and theft, Bitcoin has intrinsic value as its worth can not be tampered with through duplication and other illegal means. Additionally, halal currency should be deflationary in nature, which leads to fluctuation in value. The Bitcoin value has gone up over the course of the past seven years, albeit there have been several stumbles along the way. Gold is halal as well, as there is a limit supply available and the prices are anything but stable. One could even go as far as saying how Bitcoin is more halal under the laws of Islam than paper currency will ever be. I am not an Islamic scholar. Yet I am a muslim and earning *HILAL* income is as important to me as anyone else in Islam. I started doing some research on this several months ago, and came t Continue reading >>
Trading In Bitcoins And Crypto-currencies
N.B. Rulings are given in accordance with the Hanafi school of thought Trading in Bitcoins and crypto-currencies Q: Is it permissible to deal with Bitcoins/crypto-currencies? A: In principle Islam recognizes Gold and Silver as mediums of exchange and the jurists refer to these as Thaman-e-Khilqi or a medium of exchange that was created as such by the creation of Allah SWT. Thereafter, as modern day paper currencies evolved and they were backed by gold, they also assumed the same status due to them being backed by gold. Thereafter, once modern day currencies were no longer backed by gold, and accordingly had no intrinsic utility, but still maintained widespread global acceptance as a medium of exchange, they became referred to by the Jurists as "Thaman-e-Urfi or mediums of exchange that are held as such due to widespread overwhelming acceptance. Accordingly, they assumed many of the same rules as gold and silver in the rulings associated to the exchange of gold and silver - i.e. they must be traded on a cash basis and that currencies of the same country cannot be exchanged for different values as that would amount to interest. etc. The evolvement of crypto currencies now appears to be a new evolution in the development of money which has not yet gained the widespread overwhelming acceptance that conventional money has. The whole issue of "mining" of this currency is also not at all clear to me. There seem to be a number of research papers and articles where the exact nature or characterization of these currencies have been questioned. Further, tax authorities and legal regulators are still not yet on the same page as to how these currencies fit into existing regulations. This being the case, it appears too early to determine whether these currencies assume the role of l Continue reading >>
Is Bitcoin Halal? Islamic Scholars Wade Into Cryptocurrency Debate
Bitcoin , Cryptocurrency , Islam , Finance , Islamic , Leading Islamic finance scholars are debating whether cryptocurrencies can be deemed Sharia compliant, during the annual Sharia conference of the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) being held in Bahrain this week. The world's top Muslim finance experts are attempting to determine the validity of the fast emerging financial tools, questioning whether Islamic financial firms can invest in the cryptocurrencies alongside the rest of the world. The discussions will revisit Islamic finance concepts and how they have evolved over time, Ebrahim Bin Khalifa Al Khalifa, Chairman of the AAOIFI Board of Trustees, said in his opening remarks at the conference. "This specifically relates to riba (usury) in cryptocurrencies, such as Bitcoin, among others. Today, the floor is open to tackle this recent breakthrough in the monetary sphere from a sharia perspective." Among the many points to be discussed is whether the new currencies - like gold and silver - fall under the "ribawi" category. According to Islamic law, items falling under the ribawi category must be exchanged in equal measure and with immediate transfer of possession, otherwise transactions may involve riba or usury, a major prohibition in Islam, Reuters reported. In January, Egypt's Grand Mufti issued a fatwa ruling the trading of Bitcoin as against Islamic Sharia, following an earlier ban on Bitcoin trading issued by the Egyptian government. Top cleric Sheikh Shawki Allam warned against the digital currency, citing its risky and unregulated nature which could lead to fraudulent transactions. Allam told Egypt Today that he met with a group of economic experts to reach his final ruling. He clarified his findings on the cry Continue reading >>
Turkish Imams Fired For Violating Fatwa Against Bitcoin Trading
When dealing with Bitcoin and other cryptocurrencies, it is important to keep religious rules in mind at all times. Two Turkish imams found that out the hard way, as theyhavebeen fired over their Bitcoin activity. Its a very strange turn of events, although it isnt entirely surprising. For thosewho are unaware, using, buying, and trading Bitcoin is perfectly legal in Turkey as of right now. There is no official law against this type of activity, yet that doesnt mean there wont be repercussions for getting involved in cryptocurrency. This is especially true when you are a religious leader of sorts, as there are various rules to take into account at all times. As it happens, Turkey is subject to a fatwa against Bitcoin and other cryptocurrencies. This fatwa was issued against the use and trading of cryptocurrencies in late2017. At that time, religious leaders in the country determined that Bitcoin and altcoinswere not compatible with Islam, which is a serious matter. Although it may seem strange to the Western world, such a fatwa carries a lot of weight in Turkey and other Islamic countries. Because of this existing fatwa, two Turkish imams recently lost their jobs . Both individuals were using Bitcoin on the internet, and they eventually became people of interest in an ongoing investigation by the countrys Directorate of Religious Affairs. As one would expect, this investigation made it clear that both imams were in violation of the fatwa, and thus firing themwas the only logical outcome. Although it is the first time such a harsh course of actionhas been taken, it may not be the last. Islamic countries take a very strict approach to finance, and any violations of agreements and rules will cause problems for the perpetrators. It is good to see these guidelines apply to Continue reading >>
Fatwa Against Bitcoin: Egypt's Grand Mufti Bans Bitcoin As It Is 'forbidden In Islam'
Jan 05, 2018 09:55 AM IST | Source: Moneycontrol.com Fatwa against bitcoin: Egypt's Grand Mufti bans bitcoin as it is 'forbidden in Islam' Grand Mufti Shawki Allam said on Monday that the fatwa was issued after thorough consultations with several economic experts The Grand Mufti of Egypt has issued a fatwa banning the use of Bitcoin. The Mufti has proclaimed that any trade using the popular cryptocurrency is similar to gambling, which is forbidden in Islam. As per a report in Ahram Online , Grand Mufti Shawki Allam said on Monday that the fatwa was issued after thorough consultations with several economic experts. According to the fatwa,trading a 'virtual currency' like Bitcoin was not permissible as it is not considered by legitimate bodies as an "acceptable interface of exchange." Besides, he added that countrys legitimate bodies do not accept trade using cryptocurrencies as they impingeon the state's authority in preserving currency exchange. The Mufti also said that bitcoin could negatively affect the legal safety of those who trade with it, and lead to anease in money laundering and contrabands trade. The proclamation by the Mufti comes at a time when the trade and exchange of bitcoin is booming across the globe. The value of the bitcoin has seen a 1300 percent increase since last year and currently, in Indian currency, a single bitcoin is worth Rs 9.56 lakh. Continue reading >>
Egypt Says Bitcoin Currency Is Prohibited By Islam
Egypt says Bitcoin currency is prohibited by Islam January 2, 2018 at 9:22 am | Published in: Africa , Egypt , News A digital rendition of a Bitcoin [Pexels] Egypts Dar Al Iftaayesterday issued a Fatwa (Islamic ruling) that deems the Bitcoin virtual currency as forbidden by Islam. Bitcoin could be harmful to the countrys social and economic security, Dar Al Iftaa said, stressing that the currency could break through the national security and central financial systems. The Egyptian Grand Muftis Counsellor, Magdy Ashour, said that the currency is used directly to fund terrorists, explaining that its transactions threaten major damage to the economy. It has no set rules, which is considered as a contract annulment in Islam, that is why it is forbidden,Ashour added. Egypt was not the only country prohibiting Bitcoin, a Saudi minister, Assim Al-Hakim, recently announced in that the currency is forbidden because it is a cryptographic form of money that is vague and gives namelessness to crooks. We know that bitcoins remain anonymous when you deal with it which means that its an open gate for money laundering, drug money andharam[forbidden] money, he said. Muslims should not get involved in such dubious transactions simply to make a quick buck, to make a quick profit. This is not an Islamic concept, warned Hakim. Continue reading >>
Bitcoin Forbidden Under Islam, Top Imam Declares, Calling For Ban
Bitcoin Forbidden Under Islam, Top Imam Declares, Calling for Ban Egypts top imam has endorsed a ban on trading in bitcoin, declaring the cryptocurrency forbidden under Islam. Sheikh Shawki Allam, the Grand Mufti, issued a formal fatwa on Monday stating that trading in the digital currency is forbidden in Sharia, as it causes harm to individuals, groups and institutions. The imam argued that bitcoin carries risks of fraudulence, lack of knowledge, and cheating, Egyptian daily Ahram reported . Allam likened the trading of the cryptocurrency to gambling, which he said is also forbidden under Islam due to its direct responsibility in financial ruin for individuals. Bitcoin reached nearly $20,000 before the end of 2017 before falling. Questions are now being asked regarding the ledger used. Getty In Pictures: The 50 Most Powerful Military Forces in the World Bitcoin is the first decentralized digital currency, operating without a central bank or single known administrator. It was released as open-source software in 2009 and began 2017 with a value just below $1,000. It skyrocketed to nearly $20,000 before the end of the year, however, before falling by more than 25 per cent within a week. As of Tuesday afternoon, the cryptocurrency was valued at $13,915. Keep up with this story and more by subscribing now The Grand Mufti said the cryptocurrency was risky as it is not regulated by any centralised authority. He also said that both the currencys risk as well as its high profit potential undermines Egypts ability to maintain and stabilize its own currency. The imam added that his fatwa was issued following consultations with a number of economicexperts. Sheikh Shawki Allam likened trading in bitcoin to gambling Getty An adviser to the Grand Mufti, Magdy Ashour, told Egypt Toda Continue reading >>
Bitcoin Banned By Islam: Egypts Grand Mufti Issues Fatwa Against Cryptocurrency
Few hundred bitcoin whales can send cryptocurrency market crashing down The mufti compared cryptocurrencys trade exchange to gambling, which is banned in Islam due to its direct responsibility in financial ruin for individuals. The cleric said that bitcoin could negatively affect the legal safety of those who trade it, and lead to an ease in money laundering and contrabands trade. Allams statement came as the value of bitcoin continues to fluctuate unpredictably. As of January 3, its price stands at $15,000. Egypts Grand Mufti is not the first Muslim cleric to criticize the now-famous cryptocurrency, which has skyrocketed in value over recent months. In December, popular Saudi cleric Assim Al-Hakeem ruled that digital currencies are banned under Islamic law because they are "ambiguous." We know that bitcoin remains anonymous when you deal with it which means that it's an open gate for money laundering, drug money and haram [forbidden] money, Hakeem said at that time. In November, Turkeys highest religious authority the Directorate of Religious Affairs, also known as the Diyanet declared that buying and selling of digital currencies is at odds with its religion due to its lack of regulation and close connection to criminal activities. Last year saw cryptocurrencies steal the headlines and take retail investors on a rollercoaster ride. Despite declines in December, bitcoin has seen a remarkable rise over the course of 2017, during which its price increased by over 1,300 percent. Continue reading >>
Egypt's Bitcoin Dilemma: 'gamblers Dont Check Fatwas Before Gambling'
Egypt's Bitcoin dilemma: 'Gamblers dont check fatwas before gambling' Egypt's Bitcoin dilemma: 'Gamblers dont check fatwas before gambling' A fatwa on Bitcoin by Egypt's grand mufti is largely being ignored by traders trying to capitalise on the decentralised cryptocurrency CAIRO Hassan Mohamed is always attached to his smartphone, constantly checking the value of Bitcoin - the controversial cryptocurrency - through a mobile application. The 38-year-old father of two relies on the digital currency for his small online business that imports spare parts for computers, photocopiers, and other electronics. Most of his business transactions are done through the website Newegg.com , where Bitcoin is accepted as a legitimate source of payment. [A good friend of mine] urged me to buy him this new currency. He doesnt even know its name In seven years, Ive sold merchandise worth more than $100,000. I would have never been able to achieve this through banks, as there are so many restrictions, he said. Cryptocurrencies such as Bitcoin allow anonymous peer-to-peer transactions between individual users, without the need for central banks. According to Mohamed, he has saved at least 33 percent on bank transaction fees, which normally charge at least 3.5 percent for each transaction. A souvenir Bitcoin coin is arranged for a picture on a smartphone showing the value that day and options to buy or sell, on an app for the digital asset broker, Coinbase, in London on 20 November 2017 (AFP) Bitcoin started circulating in 2009 and Mohamed was introduced to it in 2010 while teleworking as a data-entry clerk for foreign companies abroad. He was paid for his services through Bitcoin, which he says was much easier and more efficient than traditional payment systems. At the time, one Bitcoin wa Continue reading >>
Fatwa On Bitcoin & Other Cryptocurrencies
Home / Islamic Thought / Propagation / Finance / Fatwa on Bitcoin & Other Cryptocurrencies Fatwa on Bitcoin & Other Cryptocurrencies Sh Dr Haitham al-Haddad summarises his fatwa on Bitcoin and other cryptocurrencies. For a more detailed explanation click below: For the research paper (Arabic) click here . An English version will be published soon inshAllh Next: Turkey warns the US: Get your troops out of Manbij, Syria Dr. Haitham al-Haddad is a jurist and serves as a judge for the Islamic Council of Europe . He has studied the Islamic sciences for over 20 years under the tutelage of renowned scholars such as the late Grand Mufti of Saudi Arabia as well as the retired Head of the Kingdom's Higher Judiciary Council. He specialises in many of the Islamic sciences and submitted his doctoral thesis on Islamic jurisprudence concerning Muslim minorities. Shaikh Haitham is highly respected having specialised knowledge in the field of fiqh, usul al-fiqh, maqasid al-shari'ah, ulum al-Quran, tafsir, aqidah, and fiqh al-hadith. He provides complex theories which address the role of Islamic jurisprudence within a western environment whilst also critically re-analysing the approach of Islamic jurists in forming legal rulings (ifta) within a western socio-political context. He has many well known students most of whom are active in dawah and teaching in the West. The shaikh is an Islamic jurist (faqih) and as such is qualified to deliver verdicts as a judge under Islamic law, a role he undertakes at the Islamic Council of Europe as Islamic judge and treasurer. Dr Haitham al-Haddad also sits on various the boards of advisors for Islamic organisations, mainly in the United Kingdom but also around the world. Continue reading >>
Bitcoin Fatwa? Top Imam Says Cryptocurrency Forbidden Under Islam, Compares It To Gambling
div').removeClass('stuck');return false;" class="close_tvplayer">Close Egypt's top imam has issued a fatwa against Bitcoin, calling for a ban on the digital currency. Likening Bitcoin trading to gambling, Egypt's Grand Mufti Shawki Allam said the cryptocurrency is forbidden under Islam. The imam said he issued the fatwa after consulting several economic experts. Allam said Bitcoin can undermine the stability of Egypt's own currency, adding that the cryptocurrency can "ease in money laundering and contrabands trade", the Egyptian daily Arham reported. Allam also said that cryptocurrencies can affect "the state's authority in preserving currency exchange, as well as its necessary supervising measures on domestic and foreign financial activities". to fund terrorists," the Egyptian Grand Mufti's Counsellor, Magdy Ashour, told Egypt Today. "It has no set rules, which is considered as a contract annulment in Islam, that is why it is forbidden." In December, the head of the Egyptian Financial Supervisory Authority (EFSA), Mohamed Omran, declared Bitcoin trading illegal in the country, just months after the very first Bitcoin exchange was opened in Egypt earlier in the year. Egypt is not the only country to call for a Bitcoin ban. The Middle East Monitor reported that a Saudi minister, Assim Al-Hakim, also recently declared the digital currency as forbidden due to its ability to provide anonymity to criminals. UK Bitcoin exchange hit with DDoS attack days after lead analyst was kidnapped "We know that Bitcoins remain anonymous when you deal with it... which means that it's an open gate for money laundering, drug money and haram [forbidden] money. Muslims should not get involved in such dubious transactions simply to make a quick buck, to make a quick profit. This is not an Isl Continue reading >>
Sharia Law And Bitcoins Fatwa
As the title of this post subtly indicates when I say a group. I am referring to an estimated 1.6 billion Muslims of the world, or 23% of the world's population according to the December 2012 Global Religious Landscape report from the Pew Research Centers Forum on Religion & Public Life. Due to the core belief of Muslims that Islam is a complete code for life, its followers look up to the teachings and laws of Sharia and live their lives accordingly. As stated by the Library of Congress, "In its Islamic context, Sharia may be defined as the totality of Gods commands and exhortations, intended to regulate all aspects of human conduct and guide believers on the path of eternal salvation". The primary sources of Shariah are the Koran and the Hadith. Muslims generally believe that Koran is the word of God transmitted to Prophet Muhammad, and Hadith is the collection consisting of the deeds and sayings of Muhammad. These texts hold the same value in expressing the divine will of God. If a Muslim today wants to invest, or be involved in Bitcoin, the information available to them mainly depends on the route they take. A practicing Muslim with an inquiring mind may have to go through several loops, to find a reasonable argument, before reaching a conclusion. An argument, no matter how balanced, has to have its origins fromin the proposed Islamic Finance Model as described by the Shar'iah. Considering the fact that there is no hierarchy in Islam, common law rulings and scholarly interpretations known as 'Fatwas' act an interpretation of the Sharia and its text. There's a Fatwa on Bitcoin which you can read here . Dr Monzer Kahf explains his understanding of Bitcoin from the Sharia angle, in the first paragraph of the Fatwa. He argues, "Like any other currency it is money within Continue reading >>
Egypt's Grand Mufti Issues Fatwa Ruling Against 'risky' Bitcoin
Egypt's Grand Mufti issues fatwa ruling against 'risky' Bitcoin Sheikh Shawki Allam's remarks endorsed the Bitcoin trading ban previously issued by the government [Getty] Date of publication: 4 January, 2018 The cleric and his counsellor warn Egyptians against the booming cryptocurrency, citing its potential links to corruption and terrorism. Egypt , fatwa , Bitcoin , cryptocurrency , Sharia law , cleric , Saudi Arabia , UAE Egypt's Grand Mufti has issued a fatwa ruling the trading of Bitcoin as against Islamic Sharia, following an earlier ban on Bitcoin trading issued by the Egyptian government. Top cleric Sheikh Shawki Allam warned on Sunday against the digital currency, citing its risky and unregulated nature which could lead to fraudulent transactions. Allam told Egypt Today that he met with a group of economic experts to reach his final ruling. He clarified his findings on the cryptocurrency, stating that Bitcoin could allow for tax evasion, piracy, money laundering, fraud and corruption, and therefore is forbidden in Islamic Sharia Law. The Mufti's counsellor, Magdy Ashour, added in a separate ruling on Sunday that Bitcoin was forbidden in Islam due to the possibility for it to be used to fund terrorism. "This currency is used directly to fund terrorists," Ashour told Egypt Today, adding that its usage could cause major damage to the country's economy. "It has no set rules, which is considered as a contract annulment in Islam, that is why it is forbidden," the counsellor said. Egypt has suffered a spate of terrorist attacks recently as it battles IS-affiliated groups in the Sinai region. Egypt's first Bitcoin exchange was opened in August 2017, and since then the value of the digital currency has skyrocketed, with many labelling it as a volatile bubble. In Decemb Continue reading >>
Egypt's Grand Mufti Endorses Bitcoin Trading Ban
Egypt's Grand Mufti endorses Bitcoin trading ban These are external links and will open in a new window Image caption The crypto-currency lost over 25% of its value in a week Egypt's top imam has endorsed a ban on trading in Bitcoin by declaring it "forbidden" by Islam. Sheikh Shawki Allam, the Grand Mutfi, said the digital crypto-currency carried risks of "fraudulence, lack of knowledge, and cheating". Bitcoin began last year below $1,000 (737) but reached nearly $20,000 before the end of the year . Then it lost more than 25% of its value inside a week, sparking warnings of a dangerous bubble. The Grand Mufti said risks could arise because the virtual currency was not subject to surveillance by any centralised authority. "Bitcoin is forbidden in Sharia as it causes harm to individuals, groups and institutions," the fatwa said, as reported by Egyptian daily Ahram In August 2017, Egypt's first bitcoin exchange was opened. The crypto-currency was declared illegitimate by the authorities last month. Last month, a New York-based woman was charged with laundering Bitcoin and other crypto-currencies and wiring the money to help so-called Islamic State. There are two key traits of Bitcoin: it is digital and it is seen as an alternative currency. Unlike the notes or coins in your pocket, it largely exists online. Secondly, Bitcoin is not printed by governments or traditional banks. A small but growing number of businesses, including Expedia and Microsoft, accept bitcoins - which work like virtual tokens. However, the vast majority of users now buy and sell them as a financial investment. Continue reading >>
A Saudi Cleric Says 'bitcoin' Is Haram ... Wait, What?
A Saudi cleric says 'bitcoin' is haram ... wait, what? "It's an open gate for money laundering, drug money and haram money." Jeddah-based cleric Assim al-Hakeem never fails to surprise us with his fatwas (religious edicts), but this time his views on the digital currency, bitcoin, really take the cake. During his program Ask Zaad , al-Hakeem voiced concern over the use of bitcoin, claiming it is prohibited under Islamic law. "We know that bitcoins remain anonymous when you deal with it which means that it's an open gate for money laundering, drug money and haram money," al-Hakeem said, according to Al Araby. Al-Hakeem also points out that since bitcoin is a modern currency, it has not been discussed by scholars in the past. "Bitcoin is something that is recent and new and there are a lot of serious concerns when it comes to dealing with it ... whether it's from the origin or from the aspect of sustainability and security," al-Hakeem said . He goes on to question bitcoin's dramatic increase in value overnight. "As of today, one bitcoin that was [worth] 0.1 cents is now equivalent to $11,000 plus. This is ridiculous.This is not something physical you can touch," he adds. His statements come after bitcoin's value spiked, with its trade value reaching$12,450 as of Wednesday morning. Bitcoin is forbidden under Islamic law because it is "ambiguous and provides anonymity to criminals" "Muslims should not get involved in such dubious transactions simply to make a quick buck, to make a quick profit. This is not an Islamic concept," al-Hakeem said. Bitcoin 'not compatible with Islam', Turkey's religious authorities say pic.twitter.com/3hAJkMBCFJ In November, Turkey's top religious body claimed that the cryptocurrency is "not compatible with Islam." "Buying and selling virtual cu Continue reading >>