The Preface
Well, it is quite confusing among people when it comes to crypto currency. The main issue Is Crypto Currency Trading is allowed in Islam or not? Islamic Finance is a perfect example of such an institution, where the decision on cryptocurrency is still unclear to many Muslims. This is due to Islamic experts’ concerns about whether or not digital currencies are religiously acceptable due to their speculative nature. To comprehend the underlying cause for digital currency acceptance in the Islamic world, we must first comprehend the history of money in Islam, as well as what constitutes a permitted or forbidden business transaction under Shariah (Islamic Law).
One of the most contentious issues in Islamic finance is the status of bitcoin. Learn about the Shariah perspectives on Bitcoin and Crypto Staking from well-known Islamic Scholars.
Types of Money in Islam
In general, Islam considers two sorts of money. The first is “natural money,” whereas the second is “customary money.” Natural money refers to anything that has intrinsic monetary value. Gold and silver, as well as any other precious metal, are excellent examples. Traditional money, on the other hand, can be divided into two categories. The first is fiat money, which we are all familiar with. Fiat money has no intrinsic worth, meaning it is dependent on an external authority, in this case the government, to approve it as legal tender. The second form of customary money is anything that is associated with a product or a commodity and has monetary value in the eyes of the general public. Barley, salt, rice, and other grains are excellent examples of such money.
In Islam, How Is a Tradeable Item Considered Legitimate?
This issue has been discussed by various schools of thinking. Imam Ibn Taymiyyah, a well-known Islamic scholar, muhaddith, and theologian, stated of this:
“The very aims of money and Thamaniyyah are opposed when currencies and money are inter-traded with the intention of investment and profit.”
The thing being traded should have monetary value, which is called ‘Thamaniyyah’ in Arabic. In this situation, the monetary value would be determined by A) an independent price and value, as well as acceptance and stability, and B) a key reference point for recording prices and managing debt – in other words, a proper transaction mechanism.
The thing should have some legal worth, which is known in Arabic as ‘taqawwum.’ In the Islamic Shariah, it refers to something valuable and also ‘halal.’
Why Is Accepting Bitcoin a Problem for Muslims?
Despite the fact that the globe is moving toward Bitcoin and other cryptocurrencies, the majority of Muslims are wary of entering the blockchain realm. One of the main reasons for this is that Muslims are advised in Islam to obey Islamic experts who make choices based on the two basic sources of knowledge, the Quran and the Sunnah.
Because Allah says in the Quran:
“So ask of those who know the Scripture, if you know not”
Crypto Currency Concept- Mufti Akmal
Cryptocurrency is utilised for speculative purposes, according to MuftiAkmal, but he does not consider it halal or haram. From a Shariah perspective, Bitcoin is more accurately described as a “disliked” type of trading. He also stated that if crypto currency are supported by actual assets in the future, he may have to reconsider his current judgement, but that there is no solid evidence to deem them halal in Islam at this time. So, in the opinion of MuftiAkmal, crypto currency trading is both legal (‘Mubah’ in Arabic) and undesired (‘Makrooh’ in Arabic).
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Final Thought
It is obvious that investing in crypto currency has a shaky status in Islamic finance. While many Islamic experts acknowledge that digital currencies may be the way of the future, Shariah prohibits them from taking a firm stance on the subject. Many professors are anticipated to come forward and provide an official view on the use of crypto currencies when things become clearer down the road.
