The Indonesian religious organization Nahdlatul Ulama has issued a fatwa prohibiting the use of cryptocurrencies, calling them “Haram,” or forbidden under Islamic law. The debate over the use of digital assets in the Islamic world has raged for years, but many Islamic countries, including Dubai and Iran, have enthusiastically accepted the use of crypto assets and are currently working to make their use legal.
According to a local daily, the decision to issue a fatwa against the use of digital assets came after a discussion held by the organization this week. According to reports, the discussion on digital assets became heated and dynamic as they all agreed that the use of digital assets could undermine the financial system. Another strong reason for disowning digital assets was its use for illegal purposes. The organization’s official website featured a quote that read,
“Despite the fact that crypto is already recognized by the government as a commodity, participants in the bahtsul masail concluded that it cannot be legalized under [Islamic sharia].”
Although the Islamic organization has declared crypto assets to be Haram, Indonesia as a country is rapidly adopting digital assets, with the adoption rate increasing by 40% in the first two quarters of 2021.
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The status of digital assets as forbidden is not a widely held belief among the Muslim community as a whole, with differing perspectives varying by region. For example, a leading Sharia compliance expert in Malaysia stated that the use of cryptocurrency assets is not haram and is a legitimate form of currency.
Until the central bank and the government decided to promote the use of digital assets, leading religious organizations in Dubai held a similar belief. As a result, it is clear that religious groups’ views on crypto assets are not uniform, and their fatwa against such assets has no impact on their use outside of a specific region.