Cryptocurrency is considered halal by most scholars because of its social acceptance. Some argue that it is haram because it is volatile, risky, and has no intrinsic value.
Muslims around the world are divided on how to deal with cryptocurrencies. Some people see them as a form of legitimate money, while others view them as Haram (or Forbidden). This article is all about understanding the difference between crypto and Haram, so you can make the best decision for your community.
Is crypto halal? The status of whether cryptocurrency is halal or haram is still debated among Islamic scholars. Generally, cryptocurrency is seen as haram because of its speculative nature, lack of regulation, and potential to be used for illegal activities.
However, some Islamic scholars have argued that cryptocurrency should be considered halal because it has the potential to be used for legitimate financial activities and can help the unbanked gain access to financial services.
Ultimately, it is up to the individual to decide whether cryptocurrency is halal or haram based on their own research and understanding of Islamic law.
Scholars Who Believe Cryptocurrency Is Haram
Mufti Shawki Allam Grand Mufti of Egypt: “Here is my fatwa on cryptocurrency, as today’s widely asked questions are: is crypto halal or is crypto haram; or is crypto trading halal or haram? In my opinion, trading in cryptocurrency is haram. This is because it is not approved by legitimate bodies, such as Treasury Departments of States, as an acceptable interaction of exchange. Such currencies lead to ease in contrabands trade & money laundering, and they amount to Gambling“.
Directorate of Religious Affairs Turkey said: “Since cryptocurrencies are open to speculations, mostly used for illegal deads, and far from state auditing and supervision; their trading is not appropriate at this point, in the light of Shariah”.
Shaykh Assim al-Hakeem, Saudi Arabian Scholar said: “In my opinion, is cryptocurrency halal or haram, I would say that crypto remains anonymous when you deal with it. Cryptocurrencies facilitate money laundering, drug money, and haram (forbidden) money. Hand-to-hand exchange of currencies is permissible in Islam, however, in virtual currencies, you don’t have this.”
Imam Ibn Taymiyyah, Theologian: ‘’When currencies and money are inter-traded with the intention of investment and profit, it opposes the very purposes of money and Thamaniyyah.’’
Scholars Who Believe Cryptocurrency Is Halal
Mufti Taqi Usmani – Pakistani Islamic scholar and former judge
“Cryptocurrency trading falls under the permissible (‘Mubah’ in Arabic) and disliked (‘Makrooh’ in Arabic) categories.”
Maulana Jamal Ahmed & Mufti Faraz Adam – Scholars at Islamqa.org
“A cryptocurrency is not considered a part of the real economy because it does not add value to society, promote labor, or produce goods, or services, like real currencies do. According to him, the concentration of wealth in digital assets may harm society.”
Despite all the concerns, they still qualify as assets (digital) and do have a value attached to them. In Shariah terms, Bitcoin has ‘Maal’ which refers to something that can be stored, and ‘Taqawwum’ which refers to something as having legal value.
According to them, investing in cryptocurrencies is not desirable, but it is allowed.”
Mufti Abdul Qadir – Shariah Scholar
“He is convinced that cryptocurrencies can be used as a supporting instrument for making great developments in the field of Islamic finance. He believes that cryptocurrencies are halal due to the famous rule followed by Muslim jurists that if anything is widely accepted in society as a form of payment can be recognized as money in Shariah.”
Sayyed Mohammad Al-Musawi
“Dealing in cryptocurrency is permissible like any other trading provided that it should not contradict the law of the land and does not harm others.”
Mufti Muhammad Abu-Bakar – Sharia scholar
“Bitcoin is halal as it is a store of value that people accept. It is available on exchanges, and it acts as a tool of transaction between people and businesses. As long as a currency is legal in a country, Islam accepts it too”
Dr Ziyaad Mahomed – Shariah Committee Chairman of HSBC
“The Sharia law doesn’t demand currencies to have an intrinsic value. If that was the case, fiat currencies in paper wouldn’t have replaced dirhams and dinars in gold and silver. The only fact is, there should be a social consensus that the currency is valuable and can be used for transactions.”
Everything Is Permitted Unless Proven Otherwise
Those who assume that the Sharia must address every individual incident directly bring about a form of dogmatism.
According to numerous verses of the Quran and a variety of traditions of the Sunna, everything has been allowed for us except for the things Allah has deemed unlawful.
وَقَدْ فَصَّلَ لَكُمْ مَا حَرَّمَ عَلَيْكُم
“God has delineated in detail for you what is unlawful for you.”
[Al-An’am 119]
Halal Investment Guide for Cryptocurrencies
Cryptocurrency, as an investment and finance tool, can seem complicated to anybody. However, for Muslims, it becomes even more challenging due to the tricky nature of investment and finance rules.
- Choose a Halal Cryptocurrency and Broker: You must carry out your due diligence before investing in a halal digital currency. This is stated in the Islam financial laws.
- Avoid futures trading: In Islamic culture, making predictions about a digital coin’s future price is considered gambling and prohibited.
- Don’t stake cryptocurrency: Cryptocurrencies can be staked for a period of time and earned interest, just like savings accounts. It is considered haram in sharia scholars.
- Follow the rules and pay your taxes: You should pay taxes on cryptocurrency income if your country requires it.
Halal Crypto List
| Rank | Name | Ticker | Halal? |
| 1 | Bitcoin | BTC | Yes |
| 2 | Ethereum | ETH | Yes |
| 3 | Tether | USDT | Yes |
| 4 | XRP | XRP | Yes |
| 5 | Litecoin | LTC | Yes |
| 6 | Bitcoin Cash | BCH | Yes |
| 7 | Cardano | ADA | Yes |
| 8 | Polkadot | DOT | Yes |
| 9 | Chainlink | LINK | Yes |
| 10 | Binance Coin | BNB | Yes |
What is Cryptocurrency and What does it Mean for Muslims?
Cryptocurrency is a digital or virtual asset that uses cryptography to secure its transactions and control the creation of new units. Cryptocurrencies are decentralized, meaning they are not subject to government or financial institution control. Muslims are specifically concerned about the halal aspects of cryptocurrency as it relates to finance.
Cryptocurrencies can be used to buy products and services, and some Muslims believe that they can be used as a form of payment for halal products and services. However, there is no guarantee that all cryptocurrencies are halal-compliant, so it’s important for Muslims to do their research before investing in them.
What is the Difference between Cryptocurrency and Other Financial Assets?
Cryptocurrency and other financial assets share a few key similarities, but they also have a few key differences that set them apart. Some of the most important differences between crypto and other financial assets include:
1. Cryptocurrency is decentralized – This means that there is no central authority or clearing house that oversees and regulates the cryptocurrency ecosystem. This allows for greater security and transparency since there is no third party that can impact the value of a cryptocurrency.
2. Cryptocurrency is digital – Unlike traditional currencies, which are printed and subject to government control, cryptocurrencies are digital and stored in digital wallets. This makes them more portable and easier to use, especially for online transactions.
3. Cryptocurrency is volatile – Cryptocurrencies are often subject to high price volatility, which means that their value can change rapidly and often without warning. This makes it difficult for investors to predict how their investments will perform in the long run.
4. Cryptocurrency is anonymous – Many people consider cryptocurrency to be anonymous since all data associated with a cryptocurrency transaction is encrypted using cryptography. This makes it difficult for others to track or identify your transactions or whereabouts.
5. Cryptocurrency is secure – Cryptocurrencies are often considered to be very secure since they use cryptography to protect user data from cyberattacks and theft.
Final Thoughts
Is cryptocurrency halal? From an Islamic finance perspective, it is permissible to invest in cryptocurrency as long as it is used for lawful purposes only. This means that any cryptocurrency transactions that involve riba (interest) or other forms of exploitation are not permissible. That being said, it is always advisable to consult with an Islamic financial specialist before investing in cryptocurrency in order to make sure that you are following Islamic principles.
Related post: Is Being A Financial Advisor Haram?
Cryptocurrency Is Halal or Not (FAQs)
Is Investing in Crypto Haram?
Investing in crypto can be viewed as either halal or haram depending on how it is done. If the investment involves gambling and speculation, then it is haram. If the investment is done responsibly, with an understanding of the risks involved, and in compliance with Islamic law, then it may be halal. Ultimately, each investor must make the decision that is best for them and their faith.
Is Digital Currency Halal?
Yes, digital currency is considered halal as long as it is used for legitimate purposes and does not involve any prohibited activities. This is because digital currencies like Bitcoin are not backed by any physical asset and therefore do not involve any interest or debt. Furthermore, transactions with digital currency are fast, secure, and transparent which makes them an ideal choice for those looking to make payments in a compliant manner.
Is Crypto Coin Halal?
Crypto coins are generally considered halal, as long as they are used for legitimate purposes. Crypto coins can be used to purchase goods and services, or to transfer money between individuals in a secure manner. However, it is important to ensure that the crypto coin is not being used for any unlawful activities such as money laundering or financing terrorism. Additionally, it is important to ensure that all transactions adhere to Islamic laws and principles.
Is Crypto Money Halal?
Crypto money is a form of digital currency and is therefore not subject to the same rules as traditional fiat currency. Crypto money is halal as long as it is not used for any activities that are considered haram. It should also be noted that if you are investing in crypto, you need to make sure that the source of the money is halal and not from any haram activities. Additionally, all profits made from crypto investments should also be spent in accordance with Islamic law.
Is Buying Cryptocurrency Halal?
It depends on the type of cryptocurrency you are buying. If it is a currency based on blockchain technology and has no interest or debt associated with it, then it is likely to be halal. However, if the cryptocurrency involves any type of gambling, speculation or investment in interest-bearing assets, then it is not permissible according to Islamic law.
Is Cryptocurrency Trading Halal?
Generally speaking, cryptocurrency transactions should be considered halal if they are made using properly authorized methods and if the coins or tokens in question do not involve any illegal activities or investment schemes. Additionally, transactions that involve goods and services should also be considered halal if they are paid for using lawful methods.
So, as long as you abide by these general guidelines and understand the specific nuances of your own religion, you should be fine making cryptocurrency transactions Halal.
Allahu ‘alam