The local branch of the Indonesian religious organization Nahdlatul Ulama in East Java has recently issued a fatwa on the status of cryptocurrencies under Islamic law. According to the nonbinding opinion, digital currencies secured by cryptography and used as a transaction instrument are to be considered “haram,” which means forbidden.
The decision came as a result of “bahtsul masail,” a discussion held by the organization on Sunday, Oct. 24, the Indonesian news portal Tempo reported. Members involved in the debate, which the article describes as “dynamic” and “heated,” concluded that the use of cryptocurrency could undermine the legality of financial transactions.
Another point that was raised during the meeting is that crypto could serve as a tool for committing fraud. An announcement published on the website of the East Java Nahdlatul Ulama branch quotes Kiai Azizi Chasbullah, the “discussion’s certifier,” as saying: “Participants of the bahtsul masail formed a view, despite crypto already being acknowledged by the government as a commodity, that it cannot be legalized under the [Islamic sharia].”
During the meeting, they also decided that “cryptocurrency lacks any benefit from the sharia point of view, as mentioned in fiqh,” or the Islamic jurisprudence. According to the Indonesian publication, this position has been confirmed by a “cryptocurrency expert” who took part in the religious debate to explain “the proper practice in the digital currency’s use.”
The Islamic organization’s fatwa comes after the government in Jakarta recently indicated that Indonesia is not planning to impose a wide ban on cryptocurrencies. Speaking to local media, the country’s Minister of Trade Muhammad Luthfi stated that the executive power will not follow in the footsteps of China which this year reiterated a ban on all crypto transactions and launched a crackdown on bitcoin mining and trading.
The popularity of cryptocurrencies has been growing in Indonesia, which is the nation with the largest Muslim population in the world. Crypto trade has been soaring this year and data from the 13 domestic exchanges authorized by the country’s Futures Exchange Supervisory Board shows a 40% increase in transactions during the first five months of 2021. Last year, the total volume reached 65 trillion rupiah ($4.5 billion).
Opinions regarding decentralized digital money have varied among Islamic scholars, experts, and ordinary Muslims through the years. In May, the decision by a prominent religious body in the Russian republic of Ingushetia to prohibit dealings with cryptocurrency provoked negative reactions on social media. Last October, a leading sharia compliance expert in Malaysia said that crypto assets are a legit commodity.
Source: Bitcoin News