#515: Ruling regarding the Use of Crypto Currencies
QUESTION
“Assalāmu Alaikum.Good morning. May Allāh reward you & your loved ones with good for your good work. Please, I have a question regarding “bitcoin investment”. Is bitcoin legal in Islam? And can you please backup your answer with Islamic ruling. Jazākallāhu Khairan”
“Assālamu alaykum warahmatullāh. A question was asked on the permissibility of Bitcoin.We are still expect expecting the answer.May Allāh aid the admin and bless their time.”
“My question is: What is the ruling on crypto currency and the business? I don’t know if crypto currency is same with Bitcoin though…”
ANSWER
Wa alaykum Salām Warahmatullāh Wabarakātuh.
Alhamdulillāh.
This accounts for three questions that have been asked on our Blessed platform. We ask Allāh to reward the brothers/sisters who have made these questions People of Understanding and Sound Knowledge, āmīn.
We are grateful to you for your Du’ā and ask Allāh to grant to you also that which you prayed for us, āmīn.
As regards Cryptocurrency, then know that it is a form of Digital Currency that is decentralized. Put in simple words, it is a Currency that exists only in digital form just as we have Naira, Pounds, dollars, etc. as physical currencies even though they can exist in Digital forms in the case of online transactions using Credit and Debit Cards. The difference is that Cryptocurrencies exist only as digital forms and are a complete Currency on their own.
The Bit coin is the most widely known form of Cryptocurrency. There are others such as Dogecoin, Litecoin, and Peercoin but they all function in the same manner and refer to the same functionality.
As for the rule of the Dīn on this, it should be known that the ‘Ulamā have agreed that anything that has been customarily agreed and consensual to be a means of exchange and transaction is Halāl.
Shaykh Al-Islām Ibn Taymiyyah – rahimahullāh – said in the Majmū’atu Al-Fatāwah:
“Indeed the People in the time of the Messenger of Allah – salallāhu ‘alayhi wasallam – exchanged with the Dirham and the Dinar…”
“As for the Dīnār and the Dirham, they are not known to have a fixed measure either naturally or by the Sharī’a. Rather, its reference is to the customs and usage of the people. This is because originally it is not aimed at in itself, rather , as a representation of that which they transact. Dīnārs and Dirhams are not aimed at in themselves, rather that are means to transactions…”
It is also known that the Rasūl – salallāhu ‘alayhi wasallam – and the Companions in his time used all the currencies they came across without discriminating. This is because the currencies are not aimed at in themselves but are rather a reflection of what value the people have agreed upon.
Likewise, when Paper Notes came to be used as Currencies, the Ummah adopted them as means of exchange since they have been agreed upon as such.
For this reason, Imām Mālik in the Mudawwanah is quoted to have said that “If people were to take Skins as Currency, then that would be acceptable and dealings in Usury on it would still be considered Harām…”
Therefore, transacting in Bitcoins is permissible by the Sharīah. However, we advise that you refrain from it due to its susceptibility to fraud and theft.
And Allah know best
Bārakallāhu fīkum
Jazākumullāhu Khayran
11th Rabi’l Akhir 1439AH
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