Cryptocurrencies from Islamic Perspectives

  Cryptocurrencies especially bitcoin from Islamic Perspectives 

  Bitcoin launched in 2009 but at that time many people didn`t pay attention to it. Later in 2017, bitcoin price soared from 1000 dollars at the first quarter to 20000 dollars at the end of 2017. Now many people around the world see cryptocurrencies as a good investment. Recently, CME group in Chicago has launched bitcoin futures contract and this shows bitcoin mass adoption. More than 100000 businesses around the world accept bitcoin as the way of payment. 

  Money in Islam  

 A lot of Islamic Scholars define money as something with intrinsic value which is accepted by people and they add that money should store the value. Storing the value is one of the goals of Islam and a good kind of money has this property. Islamic Scholars have different views about fiat money, some of them consider fiat money as illegal because it doesn`t have intrinsic value. They say good money in Islam is a kind of money which is supported by real assets like gold and silver.  On the other hand, other scholars say if the government accepts fiat money for tax, fine and so on, it is legal according to Maslaha Principle. From Islamic Perspective, fiat money is the reason of all unrest and economic confusions around the world and it`s not in attaining Islam`s Goals.  In general, there are three kinds of money, real money which is supported by gold, silver or something like that and has intrinsic value, fiat money which is not supported by a real asset and when the governments support it, most Islamic Scholars approve it. Third kind is cryptocurrencies and strictly speaking, because they aren`t supported by real assets and by governments, they are not legal.  Recently, an Islamic Cryptocurrency emerged in Dubai and its name is OneGram. It is supported by gold, then this crypto is Islamic and it has all properties of good money from Islamic Perspective. It has manager, auditor and all the things are transparent about it.  

 Writer`s View   

In my humble opinion, bitcoin and most of the cryptocurrencies are more transparent than fiat money and every kind of money can be misused not only cryptos. I think the major key for accepting a kind of money is mass adoption because public wisdom won`t go wrong. More research and discussion needed in this regard and bitcoin is against the hegemony of USD or any other governmental currency. It captures the control from governments and it gives this control to all people around the world. When something is accepted by people, that acceptance is intrinsic value. Why do people accept gold? Does it have an intrinsic value? Is gold supported by a real asset? The answer is no. Gold is valuable because people want it. I invite all Islamic Scholars to think more about cryptocurrencies and about the innovative and useful technology of blockchain. 

 Conclusion

 Strictly speaking, bitcoin doesn`t have intrinsic value and it`s not supported by real assets like gold and silver. It has a lot of fluctuations and in many scholars opinion, it can`t store value well. Because of these reasons, they call bitcoin illegal and against the goals of Islam. On the other hands, some Islamic Scholars approve bitcoin according to Maslaha Principle.  In writer`s opinion, mass adoption and people acceptance is the key of being legal or illegal. The writer interpret bitcoin as something good that captures control over money from governments and gives this management and control to people. At the end, I remind that regulation is necessary for cryptos and regulation can solve many serious problems. 

Resource:      Cryptocurrencies from Islamic perspectives: the case of bitcoin by Ahmad Kameel Mydin Meera