Is cryptocurrency halal? What Islamic scholars have said about Bitcoin, Ethereum and more

Cryptocurrency has been a massive thing that everyone seems to want to invest in and buy.

Despite the huge price drop recently, people have been trying to find ways to buy into certain coins and cryptocurrencies.

But for those Muslims who want to explore the idea of investing in certain cryptocurrencies, you might be wondering if it is halal.

For those who aren’t familiar, halal doesn’t just refer to food, it means anything that is permissible under Islamic laws.

Well, it appears the question isn’t as easy as you may think but we’ve tried to gather up as many answers as possible to see if people can invest without going against their religion.

So here’s everything we know about Islamic law and cryptocurrency and whether or not Muslims have anything to fear about investing in cryptocurrency – apart from the risky financial venture.

Is cryptocurrency halal?



Can Muslims invest in cryptocurrency?

It appears the Bitcoin and most cryptocurrencies are mostly halal according to Islamic scholars however there is no official guidance as of yet.

There are a number of criteria that individuals must adhere to, in order to ensure their investment or other income is considered halal.

For one, income obtained through unethical or exploitative means such as bribery, extortion, and profiteering is considered haram (forbidden). It would be challenging to argue that simply using Bitcoin as a standard payment method would violate this tenet.

According to decrypt, former Shariah Advisor to Blossom Finance, Mufti Muhammad Abu-Bakar said in his report, which was last updated in December 2019, argues that all currencies are speculative to some degree due to the nature of supply and demand; since fiat currencies, gold, and most other financial instruments are permissible under Sharia, so too should Bitcoin be.

There is an argument that Bitcoin is sometimes used for illegal purposes, Mufti Muhammad Abu-Bakar argues that this does not render Bitcoin itself illegal, and posits the following analogy to demonstrate this:

“In general terms, the use of something lawful for an unlawful purpose does not make the thing itself unlawful. Unanimously, the four Sunni schools of thought permit the lawful sale of grapes.

“Malekis and Hanbalis consider the sale of grapes to a wine merchant invalid, whereas Hanafi’s and Shafe’is merely discourage such sales.”

There are some scholars who have argued however that cryptocurrency is haram.

The Grand Mufti of Egypt, Shaykh Shawki Allam, argues is a high degree of uncertainty, risk and fraudulence. He also noted that there is no deep or systemic control or rule mechanism around the issuance of these coins and that this currency is not linked to any established marketplace or economy.

Some coins can have blockchains and systems that are not Sharia compliant. The best way to make sure if to do your research on a specific coin or token and ask a scholar or ask other Muslims.