Cryptocurrency in Islam still does not have a clearly defined status. There are both opinions, each of which relies on its own arguments. For many Muslims, cryptocurrency is something inexplicable, incomprehensible, and therefore suspicious. But meanwhile, today, there is quite a lot of excitement around this phenomenon.
Someone even says that it is a financial pyramid, a bubble. So, in order to fully understand whether cryptocurrency is allowed according to Islam, you must first define cryptocurrency. Is cryptocurrency halal or haram like Bitcoin or others?
opinions regarding the permissibility or prohibition of cryptocurrencies.
First opinion is haram
Those who ban Bitcoin and other cryptocurrencies rightly claim that all transactions in cryptocurrencies are anonymous. Those. the one who sends funds in cryptocurrency does not know to whom he is sending them. But here, we must make a reservation that sending to a completely unfamiliar person for absolutely no reason – this almost never happens in reality.
The second argument that those who ban cryptocurrencies make is the high risk that is associated with transactions in cryptocurrencies, which are compared to gambling. Here we can agree, and only in part, with high risk, but this is a risk of a completely different nature than gambling.
Further, it is argued that Islam allows the issuance of money exclusively by the state, although neither in the time of the Prophet Muhammad nor in the time of the righteous caliphs did the state monopolize the issue of gold and silver, which at that time were the means of exchange – money.
Second opinion – Halal
Bitcoin and many other cryptocurrencies also exist due to the trust of people in them, however, the implementation of transactions is controlled by the community of people themselves and not by banks. Cryptocurrency transactions are actually much more transparent than bank transactions, although they are anonymous.
Cryptocurrency is protected by algorithms and backed by intellectual assets. Yes, from the point of view of Islam, an asset can not always be tangible, such as grain, gold, or oil. Intellectual property, including programs, working mathematical algorithms are also assets, they can be sold, exchanged, pledged, and everything else.
It follows that since a cryptocurrency is a working software package that provides reliable protection for your own assets and fast, secure exchange of these same assets denominated in cryptocurrency, then it is intellectual property and an asset in itself.
At the same time, this software package exists autonomously, without the influence of states, which makes it even more reliable since it completely eliminates the human factor, with all its weaknesses, the desire to get rich at the expense of others, and passion for power.
Benefits of Cryptocurrency
Your coins, only your coins. And no bank will be able to use them for their haram operations. Of course, each individual owner of the cryptocurrency will be able to use his coins for haram purposes, but this will only be his choice, and he will only use his coins.
You can earn by trading various pairs of cryptocurrencies, as well as invest in cryptocurrencies on growth. Of course, when trading, one must be guided by the principles of Islamic finance. When trading on the exchange, you cannot use leverage and short.