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STANCE OF THE DARUL IFTAA WITH REGARDS TO BITCOIN AND OTHER CRYPTOCURRENCIES?

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#1 [Permalink] Posted on 2nd October 2017 09:23
 
 
STANCE OF THE DARUL IFTAA WITH REGARDS TO BITCOIN AND OTHER CRYPTOCURRENCIES?
 
Answer:
In the Name of Allaah, the Most Gracious, the Most Merciful.
The Darul Iftaa has been inundated with queries regarding Bitcoins and cryptocurrencies. This is a relatively new concept with many angles and dimensions to it. We also observe the reaction of China and other countries on Bitcoins. JPMorgan and other financial institutions have expressed concerns on Bitcoins which could be genuine concerns or motivated by other personal considerations.
Bitcoins and other forms of cryptocurrencies are electronic modes of currencies. It is incorrect to completely dismiss electronic modes of money as accepted modes of currency due to them not being backed by commodity.
Fiat money and fiduciary money are also not backed by commodities but are accepted modes of currencies. The possibility of electronic modes of currencies being an accepted mode of currency cannot be ruled out.
Apart from the fiqhi classification of electronic currencies, urf (accepted norm) is also an important consideration in issuing a ruling. Electronic currencies are in the infant stages. Hence, the issue of urf is also being observed for further consideration.
 
 
 
Bitcoin mining is the processing of transactions on the Bitcoin network and securing them into the blockchain.  Each set of transactions that are processed is a block. The block is secured by the miners. Miners do this by creating a hash that is created from the transactions in the block. This cryptographic hash is then added to the block. The next block of transactions will look to the previous block’s hash to verify it is legitimate. Then your miner will attempt to create a new block that contains current transactions and new hash before anyone else’s miner can do so.
 
And Allaah Ta’aala Knows Best
Muajul I. Chowdhury
Student Darul Iftaa
New York, USA
 
Checked and Approved by,
Mufti Ebrahim Desai.
 
 
I'm still not sure what is being said :(
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#2 [Permalink] Posted on 2nd October 2017 11:36
salaam

Islamically should money be backed up by a commodity?
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#3 [Permalink] Posted on 2nd October 2017 12:52
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#4 [Permalink] Posted on 3rd March 2021 02:28
WifaqulUlama wrote:
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Dear Maulana Sahab (HA):

As salam alaykum

This presentation by Mufti Amjad Sahab (HA) only clarifies some issues surrounding OneCoin (a dubious cryptocurrency), and does not talk about cryptocurrencies in general, such as BitCoin.
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#5 [Permalink] Posted on 21st March 2022 16:42
xs11ax wrote:
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Question
xs11ax wrote:
Islamically should money be backed up by a commodity?
Answer
darulifta wrote:
It is incorrect to completely dismiss electronic modes of money as accepted modes of currency due to them not being backed by commodity.
Fiat money and fiduciary money are also not backed by commodities but are accepted modes of currencies.
darulifta wrote:
Apart from the fiqhi classification of electronic currencies, urf (accepted norm) is also an important consideration in issuing a ruling. Electronic currencies are in the infant stages. Hence, the issue of urf is also being observed for further consideration.
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#6 [Permalink] Posted on 21st March 2022 16:46
Fiat money was initially deemed impermissible due to not being backed by a commodity. When fiat money came into wide circulation, it was deemed permissible due to urf.
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#8 [Permalink] Posted on 1st May 2022 13:52
abuzayd2k wrote:
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Salaam.

Jzk, but I don't think that answers my question.

Just because fiat currency is not backed up as well, does that mean it can be proof in the deen for digital currency?

Fiat currency is ribah based. Can urf supercede the prohibition of a ribah based currency?

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#9 [Permalink] Posted on 4th May 2022 03:28
xs11ax wrote:
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W-salam

Are you saying the use of fiat currency is haram?

Also, I'm very interested in your views on cryptocurrency.
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#10 [Permalink] Posted on 26th May 2022 09:49
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#11 [Permalink] Posted on 26th May 2022 10:13
Digital currencies have many flaws and can be controlled.

Digital money is progammable. Someone else is in control of it. Regulated or not - Eventually, they will be able to allocate where you spend, what you buy, how much you buy, who you donate to and so on.

If everything became digital, how would one spend money when the internet is down or the power has been cut?

A death certificate will not unlock the money owed to anyone.

The debts after death cannot be cleared so easily.

Most digital money will be lost after the death of the owner.

So many flaws with just a mention of a couple here. Therefore, as per the conclusion of the article, avoid what they feel to be doubtful!

Quote:
Ultimately, each person must strive to engage in things they are certainly comfortable with and avoid what they feel to be doubtful with respect to its permissibility. While a case was made for the permissibility of Bitcoin, each person will be brought before their Creator alone, and asked regarding their intentions. If a person feels that a matter is doubtful or is unsure, then this must be a serious consideration with regards to their personal decision-making.
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#12 [Permalink] Posted on 26th May 2022 11:10
abu mohammed wrote:
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Anyone who tries to convince me (and it happens a lot) I just ask, can I go the corner shop and buy bread with my crypto? They say no because you can't.

I simply say then it's not money.

You're right, it has too many flaws. Avoid whether it's fully classified as Haram or not. Just like you avoid anything that's known to be harmful or has potential to be risky. It's not always about clear cut Haram, sometimes common sense should be used.
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#13 [Permalink] Posted on 29th May 2022 08:01
abuzayd2k wrote:
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Salaam.

I am not saying that, but I have pondered that.

Flat currency is ribah based. That's a fact. It is not backed up by anything of value. The only way it can exist is through ribah.

That's all I know in this regard.
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