A question that we have all wondered about as Muslims is whether or not crypto aligns with Shariah (Islamic law). Some Muslim scholars are against cryptocurrencies and deem it as haram, while other scholars believe it is halal to invest in cryptocurrency.
Although there is no official agreed-upon ruling from Islamic jurists on whether cryptocurrency is halal or haram, it is our responsibility as Muslims to constantly and actively seek knowledge for ourselves. For example, you can seek naseeha (advice) from a qualified and reputable local imam before making a decision.
The Messenger of Allah (ﷺ) said: Seeking knowledge is a duty upon every Muslim.Sunan Ibn Majah 224
Today, we’ll talk about what the Muslim community thinks about cryptocurrency and what they have to say about it. I was intrigued to see how Muslims, if at all, interacted with cryptocurrency.
My main objective in doing so is to not only comprehend the process by which Muslims come to a consensus on crypto, but also to present contrasting viewpoints.
But first, what is cryptocurrency, or “crypto,” as it’s commonly called? According to kaspersky.com, it is any form of currency that exists digitally or virtually, and uses cryptography to secure transactions.
Cryptocurrencies don’t have a central issuing or regulating authority. Instead, they use a decentralized system to record transactions and issue new units.
To begin, let us look at some of the most viewed and liked responses on Quora. Later, we’ll look at individuals who are informed about cryptocurrencies and or have a finance background.
As a result, our pool of analysis encompasses perspectives from everyday Muslims to crypto researchers.
1. Quora Users
Blogger Aysha Akter believes, “cryptocurrency has a place in the future of currency which is vital in any economy.”
Abdullah Ali Abbasi, states the following:
There are five basic points for someone (like me) to decide if something is permitted or not in Islam in terms of business practices.
- Anything that can be weighed can’t be rented out
- Anything that cannot be weighed can be rented out
- Any type of currency cannot be rented out
- Any type of business whose money generation source is hidden or vague is strictly prohibited
- Any business that does not include an appropriate Loss probability is also prohibited
The source of money generation in cryptocurrencies is hidden or vague. That’s why it does not hold enough credibility to have cryptocurrency considered halal.
Finally, Faqat Allahu Aalam [Only Allah knows the best].
Another user named Junaid Moola had a rather unique take. He says, “Islam is a progressive religion, I would not think that Cryptocurrency, bitcoins, etc… is totally not permissible, provided it follows a basic guideline. However, the fact still remains that this is still like playing the stock market (gambling) which is not Sharia-compliant, and it earns interest which they call ‘dividends’ or ‘profits’.”
2. Twitter Users
On to Twitter now. Most of my Twitter feed included the same repeated tweets about how crypto was declared haram in Indonesia.
However, one specific tweet caught my eye. I believe the individual who tweeted this is not Muslim, but I am including it anyway as it was retweeted by many of my Muslim friends and Muslim following. The individual talks about how crypto is contributing to the destruction of the environment. Here’s the thread.
What Do Our Muslim Finance Brothers Think?
1. Nader Tohamy
According to Nader also known as @halalstocktok on TikTok and Instagram says crypto can be halal if used appropriately.
For a comment under his video, he responds by saying: “Performs are good just make sure you pick halal options! Check the crypto platform and make sure it stays away from haram things (lending, interest).”
2. Halal Investor
Halal Investor is a blog that aims to provide tools, education, and insight to help people better manage their finances in a prudent and ethical way. The website and social media pages provide helpful investment tips and insights from investment experts while exploring what it means to invest your wealth in a halal and ethical way in our day and age.
Moez Mahrez is a graduate of McGill University with a major in Economics and a minor in Psychology. He is a Chartered Financial Analyst. He believes strongly that there is a lot of wealth out there to be gained, and the Muslim community is lacking insight into the world of investing.
Having completed the memorization of the Quran at a young age and being a student of tafsir, he understands the importance of building and sustaining wealth in Islam.
He also believes that achieving financial independence can be a means of spiritual salvation and societal contribution.
Moez can be found on TikTok @halal.investor. In this video, he tells us which cryptos are haram and to avoid. Some examples are AAVE, FTX, Synthetix, Celsius, Compound, and Yearn Finance.
3. Islamic Finance Guru
Islamic Finance Guru is a hub that helps Muslims with their investment, personal finance, and entrepreneurial journeys Co-founder of Islamic Finance Guru, Ibrahim Khan holds a BA in Philosophy, Politics, and Economics from the University of Oxford, an ijazah in the memorization of the Quran from Egypt, and an MA in Islamic Banking and Finance from Markfield Institute.
I recently came across the IFG TikTok, where Ibrahim khan explains five reasons Muslims should invest in crypto. (Watch the video below for context. There is also a halal crypto guide on their website.)
5 Reasons Muslims Should Invest In Crytpto Now
- Crypto is just getting started
- It yields fantastic returns
- You’ll get rid of brokers and poof better rates for everyone
- Blockchain tech has real potential
- The top 5% are taking it very seriously
Why A Muslim Presence In Crypto Is Important
“To put it simply, we need to have a seat at the table. Being at the forefront of one of the most innovative industries allows us to help to shape the world in line with our religious values,” IFG staff writers said.
Another point that they have made: If we want to establish our own projects in the space as a community, having Muslims with first-hand experience of the sector is a must. “Having Muslims in crypto can usher projects towards halal offerings that can create genuine value to our Ummah and the general public,” they point out.
4. Marhaba DeFi
Finally, let’s discuss the platform Marhaba DeFi. Muslim TikToker Adel Ghadban posted a video advising Muslims to research and check out Marhaba DeFi. You may recognize Adel, as he’s known for his Islamic videos on TikTok.
Marhaba DeFi is a halal, decentralized finance platform. Its purpose is to bring Shariah ethics to the DeFi ecosystem by providing a trustworthy and transparent DeFi system for both the Muslim and the Western cultures.
That way, Muslim and Western cultures will benefit from the marriage of DeFi innovation and ethical practices found in Islamic Finance.
What makes Marhaba DeFi unique is that it is a cryptocurrency that is designed by Muslims for Muslims, and it is the first of its kind. In addition, the board includes well-known sharia scholars such as Dr. Farrukh Habib, Mufti Billal Omarjee, and Dr. Mohammad Abdullah.
So Is Cryptocurrency Halal?
Following my research into these diverse Muslim perspectives, I believe I am more open to engaging with my local imam and experts I trust to guide me toward ethical investment strategies.
It is crucial to emphasize, however, that I am unable to make a final judgment at this time because there is no solid evidence that cryptocurrency is halal in Islam.
And so, if I were to sum that up, I would second what @halal.investor said: “Check your intentions before investing.”