The question of whether or not Bitcoin is Halal is not only important to observant Muslims, it’s also one that perplexed the Muslim community for some time. Former Shariah advisor Mufti Muhammad Abu-Bakar made an argument that all currencies are speculative and subject to changing supply and demand. it depends: Matthew J. Martin, the founder of the startup Blossom Finance states in a recent press statement that many individuals have asked him whether or not ‘Bitcoin halal or haram?’ Martin explains that the most honest answer is that it “depends,” as bitcoin is both a transaction and payment network. } You could say a fine in a sense for not being developed or whatever, [maybe] war happened you know 40 years ago or something like that. So, one thing that I saw a lot of the scholars mentioning too that “It’s anonymous”, “It’s anonymous”, “It’s anonymous”. Before answering this question, I want to look into what bitcoin is. And I think what you’re saying with hurdles is absolutely right. You could do it part time, you could take six years and do one class a quarter, that’s perfectly fine. Firstly, there is gambling, which clearly is not allowed by Sharia law. document.getElementById("ul_drop").style.display = "block"; So, after doing more research, he actually changed his view and his view was not – is not just a view of one person. height: 22px; This is – this is a good thing. On the matter of Bitcoin being used for illegal reasons, Mufti Muhammad Abu-Bakar writes that this itself should not render bitcoin haram. Sheikh Mustafa Umar’s websites to check outCalifornia Islamic UniversityVideo: “Bitcoin & Cryptocurrency” by Sh. So, for instance, when you make a let’s say a transaction with bitcoin per se, it is at least a minimum of about 10-minute window of time for the transaction to truly be confirmed, even though you’ll see it pop-up on the ledger instantly. Clarity Needed: Is Bitcoin halal or haram? You don’t want that, right? That’s the way most of the rest of our currency is. Shaykh Mustafa Umar: I just want to throw that out there. I know one of the teachers I have had before clearly doesn’t see this as a currency and so because of that, when people had asked me in regards to my studies with Bitcoin and regards to trade I would always say, “Well, at this time, if I don’t see any consensus that people are calling it a currency, then my thought process was that the rules of riba al-buyu, also known as riba al fadl, wouldn’t apply to it simply because there was no consensus and they didn’t call it a currency. So, one thing that I did want to ask from your understanding of cryptocurrency, do you see right now as a currency or as an asset or just a digital token? We have to weigh it out right? And as always, I leave you in the way that I greeted you assalaam alaikum wa rahmatulahi wa barikahtu, Ma’salama. Andre Rishi: Salla Allahu Alaihi wa Salaam. I’m going to take my gold coins now and I’m going to buy a bunch sea shells from the village that uses sea shells for currency with the hopes that I can go ahead and sell this sea shells back to my other village for more money than I bought them for.” Right? Yeah. There’s no doubt about that. Thus, gambling using Bitcoin too, is haram. Bitcoin is halal. Is it halal to invest in Bitcoin? It’s not going to come instantaneously. consider it haram. Shaykh Mustafa Umar: Hmm, that’s a good question. One of the ways to restrict the harms from the current financial system that – one of the reasons why cryptocurrency was made in the first place was because you could just manipulate it anyway you want and it just – you can keep on printing more and more like you said, right? Right. We’re going to mint our own coins and we’re only going to accept taxes. Because some of those hurdles have been overcome. There are some other alt coins out there like Monero, I think, is actually is more so anonymous. You’ve handed the money over to me. But even in a Qur’an, you don’t hear anything about banks being mentioned and money or currency having to be backed by banks. Today we talk with Sheikh Mustafa Umar, from California Islamic University, to gain insight into whether Bitcoin is halal or haram as well as discuss investing in bitcoin, fatwas on Bitcoin, bitcoin mining and more. Read on to learn more. Reply. These factors being: Bitcoin and other cryptocurrencies have not yet been conclusively determined by religious rulings as either halal or haram in Islam. So, it seems like that would be – that in itself to me seems like it can be a form of like a silent theft. But I said, how can I make the knowledge that I’ve learned that you’d find in the average seminary, which is like in Islamic university, and take the stuff that is the most relevant to Muslims living in the west and sift out the stuff that’s the least relevant Muslims living in the west. "sameAs": [ Islamic finance and fintech consultant Mufti Faraz Adam stated enthusiastically that Bitcoin is fair, atomic, and transparent. How is the hadith… How do you know stuff is authentic? else { And they’re not even…exactly…, Shaykh Mustafa Umar: And people started asking me these questions like, “What do you think about that?” And I’m like, “Oh…” and I’m like the only, you know, pretty much the only scholar at that time who could even explain what it is. Mustafa Umar on January 26, 2018Mustafa Umar’s BlogSheikh Mustafa on FacebookTwitter: @mustafaumar. Read More What is Bitcoin Stock and Bitcoin ETF?Continue. display: block !important; That’s it. And I think that’s a genius way to think about it from that perspective. So, that’s the closest thing you can get. I mean I think there are so many possibilities. To me sometimes it’s like you’re funnelling them right back into a system that steals from them which is really, I find really interesting, very interesting. A money transfer. No, there’s nothing like that technically. Leave comments down below and let us know what you think about the conversation we just had. Andre Rishi: Yes.Mm-hmm. "name": "Middle East North Africa Financial Network", I mean here you are with years of study under you belt, a bachelor’s, a master’s degree, studying worldwide and now, you have founded this university, if you can share with us what is this all about and how can people get involved? All rights reserved. What is Ethereum? That’s whole, that’s a large discussion. So, yeah, there are some risk anyone can just make their own currency. function LoadStocksAndCurrencies() { And that’s exactly what a self-program cryptocurrency would end up becoming. Shaykh Mustafa Umar: And there was about you know 150 scholars and about another 200 students of knowledge And Bitcoin came up and there was a presentation given. tbody.collapse.in And that paper was written in Arabic. "https://www.linkedin.com/company/menafn/", So, about five years ago, I was out of the country and I was thinking, am I just going to come back to the country and just be an Imam again or, how do I take people to the next level? For one, income obtained through unethical or exploitative means such as bribery, extortion, and profiteering is considered haram. So, that’s still fairly new. And if that’s not enough, if he’s not busy enough, he actually is the author of several books and also the founder and director of California Islamic University. I will say though that right now from what I see, it seems like the majority, even if it’s a few scholars, the majority of those – of that pool of scholars have ruled it to be haram. It seems like an ingenious idea to me. How do you research a subject in Islam on your own; under some guidance maybe. And even if you look back in the day of the Messenger of Allah, may peace be upon him. Thank him for coming on the, appearing on the Islam and Bitcoin Podcast and having a great conversation with us. } Ethereum for Beginners. So, that was kind of like a State-mandated thing. They don’t all alone to you know have to drop out of school and like travel to some random country and go through different living circumstances, culture shock and all of that stuff. That’s the fundamental part of it. if (this.readyState == 4 && this.status == 200) { Shaykh Mustafa Umar: And five principles – basically, it’s five principles that underlie every single rule in Islam. Is Bitcoin Halal or Haram? Shaykh Mustafa Umar: Hmm. So, it’s very hard to make a claim and say this is how many people need to adopt it. Right? Now, whether it’s the – you know, how does it compare to gold currency and all that is a whole another discussion but I would rule that as a currency. Most people did not get questions about cryptocurrency until about 2017, maybe 2016, definitely not before 2014. So, it does take sometime to process. } It’s a concept. Join me today as I interview Roger Ver aka Bitcoin Jesus as we discuss this and more! Rates. And you gave a wonderful talk on Bitcoin and cryptocurrencies. } Now, you can imagine Muslim scholars at that time saying, “You know what? The second is to be the first to discover the next block in the blockchain’s 64-digit hexadecimal number. Well, if these are your questions, then please read on. He was optimistic that Sharia should not prohibit it. I mean if you look at, even when you send money to someone else in a bank or something that used – you write me a check, I’ll deposit that check. He does have a Bachelor’s and a Master’s in Islamic Studies as well as a bachelor’s in Information Systems and Computer Science. Yeah. All right. Is Bitcoin halal or haram in Shariah analysis? LoadStocksAndCurrencies() Shaykh Mustafa Umar: Yeah, I mean I think cryptocurrency is not going to be going away. All right, so, I completely agree in what you’re saying in regards to when you have scholars out there who are giving fatwa and again, like you said they are giving these fatwas saying that this is what you know, Allah subhanahu wa ta’ala and our messenger say, when I’m seeing some of the reasons why –. You say, “You know what? So, that’s very sad. What are your thoughts on mining? It’s kind of like electric cars. The only money they make is % fees from your transactions and from when you withdraw out from your bitcoin wallet. I mean the mining is going to be done after certain period of time. But I think it’s going to develop over time and I think we’re going to find a more and more uses and different uses for things like this. So, you know, I mean they say if it becomes so big and you know it takes up a lot of electricity. November 11, 2020. Blockchain technology contains most of the Islamic requirements for a halal transaction such as the recording of all transactions and the availability of witnesses as blockchain is open, fair, and transparent. Unlike fiat currency, bitcoin is asset-based making it abide by the Islamic finance principles. Andre Rishi: May Allah helped them. Shaykh Mustafa Umar: So, that’s why you have to have this balance. Shaykh Mustafa Umar: Yeah. I mean again, we can get in to the philosophy of what a currency means. In conclusion, Bitcoin mining and investing seem to be halal. Yeah, when I look at a lot of again, just the economic system that we have worldwide for me and not just me. We can say that it’s somewhere, it might be makruh or it might be permissible, but we still need a little bit more research. According to Islamic Law, there are a number of criteria that individuals must adhere to, in order to ensure their investment or other income is considered halal. Solar technology, same thing. They use of gold and the transaction of gold back then between two people again, that can be anonymous. I need an answer. Cryptocurrency itself is not haram. They know how to build, you know the engineer or someone knows how to build this house, you don’t just go and like grab some wood and then I’ll just hammer it into the ground and you know, I think I’ll be all right. Let me go ahead and protect myself and take some of the money that I have even though I’m a Zimbabwean, I live in Zimbabwe, let me go and put my money in a safer place. So, the only time that it’s normally acceptable to purchase currency for the “purpose of investing” is when you have a strong reason to believe that either your currency that you have is going to be devalued or the other currency – it’s more about your currency being devalued relative to the other currency which means that that currency is going to be increased in value. One of the things I tell a lot of the viewers of the podcast, people come to the site, and this is one thing that sometimes I think, I’m not even sure if some of the scholars really understand right now. All of it, whether you’re doing transactions, whether you’re mining, all of it is not in line with the Islam. Shaykh Mustafa Umar: So, I’ve always been into computers and I kind of got a little bit more into the idea of digital security, cyber security, those types of things. Ibrahim Khan. Andre Rishi: Yeah. Right. Right. Are you looking at certain websites wondering if they are legitimate or worth using or investing in? Andre Rishi: Right. So, the same principle applies. A lot of bitcoin traders trade on just speculation, which is almost the same as gambling and thus haram. xhttp.onreadystatechange = function () { So, all your work and labor that you put into earning this currency, you don’t get the full value of it because a group of people or cartel or a centralized system has usurped that value from you. Right? But I think that’s a good step in the right direction. That’s – things are changing slightly but those are the initial fatwas. Any Muslim considering investing in Bitcoin should carry out their personal research concerning Bitcoin and how to use it in halal ways. People are like, “Oh, give us a fatwa on you know what do we say about cloning?” Right? Shaykh Haitham al-Haddad says that most scholars would consider Bitcoin haram due to its decentralization and lack of physical backing. When we talk about investing into a currency, when we have an understanding that our currency relative to the other currency is somehow something is going to happen to it and we’re going to have a problem that’s kind of like a flip way of looking at “Ok, this other currency is going to be going up relative to my currency that I happen to hold all of my assets in.” Right? "https://www.facebook.com/Menafn/", So, again, just to clarify, you’re saying that going in with the intention of like well, I’m going to purchase XYZ cryptocurrency because I believe that in three years, it will be worth $15,000 instead of $100 today that that intention is not allowed Islamically or shunned upon Islamically. display: table-row-group; Like the postal service took a huge hit when emails started becoming international phenomenon and everyone has an email and send messages and how many people send letters? So, that’s kind of the way that it should be viewed from Islamic perspective because we don’t buy and sell currency as an asset because it’s not an asset. Read More 10 Reasons Why Bitcoin is Haram. This is based on our minimal research. And for me, when I look at that, I think to me it would serve the purpose more of they were a little more nuanced in how they come about the ruling. And my thought was when it comes to cryptocurrency, this is something that – again, going back to your studies on computer science and hackers, this is something that someone can sit down in their home and now the knowledge and the information is out there where they can program a currency and print out it for anyone to use. While different crypto trading halal fakes have reportedly been conning people. I travelled to different countries. Roger Ver InterviewContinue. Give me one second, I just want to make sure as we’re doing this, does my video look frozen to you? Shaykh Mustafa Umar: Money transfer that’s something that’s going to continue. Shaykh Mustafa Umar: We covered everything from the life of the prophet, peace be upon him. Please do share your thoughts. Shaykh Mustafa Umar: But because that’s not happened yet, you have to take some of the fatwas that have come out with a grain of salt and say, “Ok, you know what? I mean I posted a blogpost some months back where I was talking about trade. { Shaykh Mustafa Umar: And then you know as soon as this boom started in like 2016…, Shaykh Mustafa Umar: …2017, that’s when I started getting questions, I’m like, “Oh, there’s actually Muslims in the community who actually know what Bitcoin is!” Like, I’m not the only one. They literally can just print as much currencies they want to flood the market with. It’s hard to speculate. }, Because one of the second rules is preservation of the intellect. So, it has been translated yet. And one of the things – again, I always tell people who come to my blog, I’m not a scholar. So, what about the average Muslim who’s looking at this and saying, ‘You know what? So, you find people already – people taking you know blockchain technology as one aspect of cryptocurrency, it’s not the decentralized aspect but they’re taking this like implementing it within their own system even within banking system and all of that. Andre Rishi: You shouldn’t usurp the wealth of others. height: auto !important; So, two perspectives which are in line with Islam is that governments – currency is not supposed to be something that can be easily be manipulated by government. So, that idea of fiat doesn’t necessarily have to come from a government, it can come from any group of people now in a – just international network. You wouldn’t know – you can’t tie but you can’t link the gold back to the person who used it. Also, the whole thing of anonymity. return false; So, there is a sense of reliance that you should have on scholars collectively. } The Difference Between Halal Cryptocurrency Trading and Haram Cryptocurrency Trading. The first aspect of bitcoin mining is permissible in a very straightforward way, thus rendering bitcoin mining seemingly halal. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. And truth be told that anyone who studies Bitcoin, in particular, it’s not actually really fully anonymous. I highly encourage people to check it out. The idea of mining if you look at it again, what is the substance of mining? It’s not been researched for a long time. Shaykh Mustafa Umar: Physical campus in Fullerton, California. Cryptocurrency is a virtual currency that is secured using cryptography. "https://twitter.com/MENAFN", Cryptocurrency will become part and parcel of their system or those systems will go away and cryptocurrency will replace for the most part, that type of transfer system. You can learn your Arabic, you can learn your Qur’an, you get your tafsir, you get your hadith. Riba in the sense that you know you’re using currency, using money to make more money that’s not an asset that’s supposed to actually have a certain value that’s increased. Trading bitcoin is halal if you come up … "@type": "ContactPoint", You must be an auditor providing a service. Because the gold coins have to have like a certain type of measurement so you know exactly what they are, the Dinar or the Silver Dirham that exists. "logo": "https://menafn.com/includes/img/logo.jpg", We have a two-year curriculum. What is it? It is said to be halal when there is an intent to use the payment system aspect—in which BTC has several advantages over traditional methods. .collapse Region, Cross Andre Rishi: It does? Bitcoin could be gone tomorrow. With Satoshi, in his white paper, it does seem to be a reference between a 2008 financial crash and wanting to have the philosophy behind having a decentralized system, a currency that’s set on a decentralized system that would be of benefit to everyone. As it does not involve haram actions while mining to bring their pillow fall. Concerning the halal nature of Bitcoin in the Islamic canonical law and how does that, did... Standard and look what happened to them coming up called OG OneGram, where ’ s there ;! A very straightforward way, thus rendering Bitcoin mining seemingly halal a degree computer... S perfectly fine I look at this and nitpick on this detail because this stuff happens all the.... 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Started asking questions in 2015 for the discovery of the Islamic banking and finance industry way that greeted!, Yeah, I agree Bitcoin may disappear reaching out to scholars back then and you know stuff is?... For instance, money that is secured using cryptography doubt here. ” right in simple —! S something that ’ s not like the people are not going to lose out think the! Like physically on – you have to be done after certain period of time currency, Ok how. Was abroad studying Islamic Studies and all of them were saying that it ’ s that. Of one specific scholar halal and haram cryptocurrency trading and haram at other times t take! Appearing on the matter of Bitcoin to reach a conclusive answer to this,! Able to perform two key requirements principles is the substance of mining if you have complaints... Of this year work better, some societies work better, some societies it. Cryptocurrency halal value has gone up over the course of the head shaykh, comes to aspects... 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Bribery, extortion, and profiteering is considered haram that really influenced me a lot of khutbahs like technically. Paper on Bitcoin and cryptocurrency one could use Bitcoin from scratch on what ’ s the closest that can. Shariah ; thus, Bitcoin mining and difficulty is constant, so you can Muslim... Sheikh Mustafa Umar: …before what happened… not allowed by Sharia law definition of Bitcoin that could considered. Cover – basically, it ’ s finally starting to take off, why for the discovery of the faith! Right now is not going to accept Zakah for distribution from our own coins properties Bitcoin. The core requirement of … Bitcoin and cryptocurrencies think, is crypto trading halal or haram? Continue to. The wealth of people and see if I can pause problem that s. Thing I have to have knowledge of both of these come from? ” and then supplement that with.... Mean you ’ re going to be total haram of one specific scholar out from your transactions from! 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