Islamic scholars deem cryptocurrency transactions impermissible, citing lack of intrinsic value.
Renowned Islamic scholars, including Mufti Muhammad Taqi Usmani and the Darul Ifta of Jamia Darul Uloom in Karachi, have issued a fatwa declaring cryptocurrency transactions impermissible for Muslims. The ruling, which gained prominence in July after being issued on June 10, 2026, addresses practical questions regarding the purchase of books and online educational courses using digital currencies like Bitcoin, Ethereum, and USDT. The fatwa board concluded that any purchase or transaction involving cryptocurrencies is entirely prohibited (najayez). The core reasoning behind this decision lies in the Islamic definition of 'maal' or wealth, which requires state guarantee, legal recognition, or intrinsic value. Cryptocurrencies, lacking backing from any central bank or government, are considered by the scholars not to be true assets but rather imaginary numbers in a digital account. Referencing Imam Ibn Abidin's definition of 'maal' from the authoritative text 'Raddul Muhtar', the scholars argue that cryptocurrencies do not meet the criteria of having a natural inclination for humans and being storable for use. Furthermore, the ruling invokes the Quranic prohibition against unjustly consuming each other's wealth, stating that transactions for non-existent assets fall under this restriction. Consequently, any item purchased with cryptocurrency is not considered legally owned by the buyer. For books bought with crypto, their use or sale is deemed haram, requiring a return to the seller for a new transaction in valid currency. For online courses, the buyer does not gain ownership, and the course material must be completely deleted from their devices, with usage or gifting being impermissible. The scholars also highlight the speculative nature and extreme price volatility of cryptocurrencies as a form of 'gharar' (uncertainty or deception), which is prohibited in Islamic contract law, citing Prophet Muhammad's (PBUH) prohibition of transactions involving pebbles and deceptive dealings.
This fatwa reflects a traditionalist interpretation of Islamic finance, emphasizing tangible assets and state-backed currency as foundational to economic transactions. The scholars' concerns about the lack of intrinsic value, regulatory oversight, and potential for illicit activities like money laundering and illicit trade align with global regulatory discussions around virtual assets. While some Islamic scholars may hold differing views, recognizing market demand as a form of value, this ruling underscores a significant division within the Islamic financial community regarding digital currencies. The analysis highlights the tension between technological innovation and established religious-financial principles, posing a challenge for Muslim individuals and institutions navigating the evolving FinTech landscape. The long-term implications for cryptocurrency adoption within Muslim-majority regions will depend on how these differing interpretations evolve and whether new frameworks emerge that bridge technological advancements with Islamic economic ethics.
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