The legality of cryptocurrency from an Islamic perspective: (2024)

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Abstract

Purpose - Islamic scholars are not unanimous on the legality of cryptocurrency. Muslims are confused about the permissibility of cryptocurrency. Thus, this study aims to evaluate the cryptocurrency from Shariah’s perspective. Design/methodology/approach - This study is qualitative and uses a deductive research approach. It drives conceptual and logical deduction fromQur'anand Hadith. Findings - The cryptocurrency is an intangible currency without any precious metal or commodity backing. It does not possess any intrinsic value, and also its prices are highly volatile. On these grounds, cryptocurrency does not qualify as money in Islam. Social implications - Cryptocurrency is not compatible with Islamic principles. It is not legal tender and is not backed by any government. Its prices are highly volatile, which opens the door for speculation. Muslims should avoid investing in it. Originality/value - This study fulfills an identified need to evaluate cryptocurrency as money from Shariah’s perspective.

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Cited by:

1. Hashim JUSOH & AbdelKader Ouatik EL ALAOUI & Amina DCHIECHE & Ahmad Faizol ISMAIL & Rosalan ALI, 2024."Relationship Between Bitcoin and Islamic Stock Indices During the COVID-19 Pandemic and the Russia-Ukraine Crisis,"Asian Economics Letters, Asia-Pacific Applied Economics Association, vol. 4(3), pages 1-8.

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Keywords

Decentralization; Quran; Speculation; Sunnah; Cryptocurrency; Intrinsic value; Gold or silver; E40; Z12;
All these keywords.

JEL classification:

• E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
• Z12 - Other Special Topics - - Cultural Economics - - - Religion

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