Is Crypto Halal or Haram?

When something new arrives, especially in the tech world, the age-old Muslim question rings true again: "Is it halal? That's the first thing that pops into our heads, right? As Muslims, our values are paramount, no compromises. So, when some mysterious “Satoshi Nakamoto” rolls in with his “Bitcoin”, a digital currency stranger than fiction, we naturally ask ourselves “Is it halal?” Now, Bitcoin has established itself as a significant player in the financial landscape, and moving beyond Bitcoin, we have thousands of altcoins. However, the question of these coins and tokens compatibility with Islamic principles remains critically relevant for many Muslims until now. Let's break this complexity together and highlight key considerations of crypto's alignment with Islamic principles.

Difference of Opinions

First thing you should know is that there are diverse perspectives and sayings on the subject at hand. Shariah scholars have presented different stances on crypto. But does this diversity pose a roadblock or a significant hurdle? Absolutely not! Here's why!

Contemporary issues often require scholarly reasoning and interpretation (ijtihad), which is why we have different viewpoints on such contemporary issues. In fact, scholars' difference of opinions is a mercy from Allah (SWT) for this ummah.

The core of the debate between Islamic scholars lies in understanding what crypto truly is, which itself is still a subject of global discussion and exploration. Differing opinions among Islamic scholars stem from the different types and nature of crypto assets, from how they're used to the technology behind them, and what gives them value. Another major subject of discussion is the different definitions of mal (asset or wealth) in Islam.

Many scholars have agreed that many crypto assets fulfil the requirement to be considered as mal from the Shariah perspective, thus classifying them as digital assets.

Is Crypto Halal?

There is no one-size-fits-all answer. Whether it is halal or haram depends on several factors:

• Type of crypto asset:

Different types of crypto assets have varying characteristics and functionalities, influencing how scholars view their permissibility. The ruling on a stablecoin may differ from that of a NFT or CBDC.

• Utility and benefit:

In Islam, an asset's validity (to be considered as mal) isn't based on its form, but on its purpose and lawful use. Intangible things like crypto can be considered an asset if they provide valid benefits, similar to how services qualify as mal. Scholars have emphasized the role of custom (urf) in determining something as mal.

• Shariah compliance:

Even if crypto offers benefits, it must comply with all Shariah principles like avoiding riba and excessive uncertainty (gharar) and other impermissible activities under Islamic law.

• Understanding the underlying network:

To assess a crypto's permissibility, it's crucial to understand its underlying blockchain network dynamics, its purpose, value proposition, and potential real-world benefits. The blockchain’s alignment with Shariah principles plays a role in determining the halalness of the crypto asset.

Bottom line: There's no simple "haram" or "halal" label for every crypto asset.

Determining the halalness of a specific crypto asset requires a careful and in-depth study of various factors. Feeling overwhelmed? That's normal. Navigating this intricate landscape can be tricky. That's precisely why, at HAQQ, we prioritize education. We've established HAQQ Academy to assist you in understanding the intersection of Islam and crypto. And most importantly, we have our trusted Shariah Board standing firmly behind us, ensuring utmost clarity and unwavering guidance in this complex landscape. 

One more thing:

Is ISLM Halal?

YES! ISLM is Sharia-compliant. A Fatwa issued by the world’s leading Shariah scholars certifies it Halal. The Fatwa has been endorsed by Indonesia’s and Kenya’s highest Islamic scholars bodies, the Indonesian Council of Ulama (MUI) and the Kenya Fatwa Council.

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