An Islamic scholar recently declared Bitcoin “permissible” under Sharia law, thereby opening the market to 1.6 billion Muslims around the world. This may also explain the sudden surge in Bitcoin’s price by more than $1,000 as the Muslim crypto traders increased.
Olga Feldmeier, CEO of FinTech startup Smart Valor says:
“Many speculated that the sentiment around bitcoin was getting more positive, and that it may have been related to Sharia law compliance”
‘Is Bitcoin Halal or Haram: A Sharia Analysis,’ a report written by Muhammad Abu Bakar, a certified Muslim legal expert, analyzes whether cryptocurrencies fall under halal or haram (prohibited) based on Islam’s strict definitions of money.
According to Abu Bakar,
“Crypto traders should not purchase cryptocurrencies for investment purposes. Rather, it is advisable to utilize cryptocurrency networks as a payment system in the cases where cryptocurrency network offer specific benefits and advantages over conventional systems.”
The study stated:
“Bitcoin is permissible in principal as bitcoin is treated as valuable by market price on global exchanges and it is accepted for payment at a wide variety of merchants. Moreover, many private individuals accept bitcoin as a medium of exchange in their private transactions.”
Matthew Martin, CEO of Blossom Finance says:
“Several recent fatwah issued by prominent Muslim scholars offered incomplete or contradictory opinions on the topic. With all the confusion out there, we wanted to offer clear guidance supported by solid research that benefits both laypeople and practitioners of Islamic finance”
The Sharia Law prohibits ‘usury’, the practice of lending money at high interest rates. As Bitcoin trading is volatile and involves huge profit and loss, there have been several debates in the Islamic Scholar community as to whether Bitcoin trading is permissible or not.
Josh F. Koya, a Twitter user said:
“The revolution is here… the bull is pawing with its forefoot, getting ready for the take off.”
Isaac Fay, another Twitter user said:
“But it will take more than 1 scholar to cause 1.8 billion Muslims to participate in it. Example, there’s a debate between two sides of important scholars about alcohol for centuries. One says it’s okay. One says it’s a big no-no. Similar concept.”