A regional branch of the world’s largest Islamic organization in Indonesia has declared digital currencies “haram”, which means that they are forbidden under Islamic religious law. The group led a heated debate in which experts for digital currencies and religious scholars argued against the admission of digital currencies with a final vote.
For years, the debate about whether digital currencies are legal under Islamic Sharia law has continued with no definitive direction. A local branch of the Nahdlatul Ulama, an Islamic religious organization, ultimately ruled against them. The branch in the mountainous Indonesian province of East Java declared digital currencies to be the haram during a meeting on October 24, local sales outlets report.
Nahdlatul Ulama is a religious organization based in Indonesia with an estimated membership of up to 90 million. This makes it the largest Islamic organization in the world and therefore very influential both in Indonesia and in other Muslim countries.
According to the local outlet Tempo, the organization recently had a discussion on digital currencies. Members concluded that digital currencies violated Islamic principles after listening to an expert explain how they work.
One of the factors that members complained about was the use of digital currencies in fraud. They also concluded that digital currencies are of no use from a Sharia perspective.
On the organisation’s East Java faction’s website, the group wrote: âThe participants in Bahtsul-Masail believed that although crypto has already been recognized as a commodity by the government, crypto cannot be legalized [Islamic sharia]. “
Nahdlatul Ulama is the most influential Islamic group that gives its opinion on digital currencies. However, it is not the first time that the application of Sharia law to digital currencies has been discussed. There have been Islamic scholars who believe that digital currency is haram and against religious ethos and those who consider it good in itself but sometimes use it in illegal business.
One of those in the second group is Mufti Muhammad Abu-Bakar, a former Sharia advisor to Blossom Finance. In his report, he argued that BTC should be labeled as Halal only because of its volatile and speculative nature. All currencies are speculative in nature, including currencies issued by central banks.
He also debunked the argument that digital currencies are used for illegal purposes and are therefore haram.
“In general, using something lawful for an illegal purpose does not make the matter itself illegal,” he wrote.
Mufti Faraz Adam, a UK-based Islamic fintech advisor, agrees. In a 2019 podcast, he said, âIt’s fair, it’s simple, it’s transparent, it’s atomized, it’s not monopolized. Then I don’t understand why Sharia should ban this system. “
Nahdlatul Ulama’s latest announcement comes at a time when the adoption of digital currencies in Indonesia is skyrocketing. According to the latest data from Coinformant, Indonesia tops the global rankings for digital currency interest with a 1,770% increase in engagement and a 600% increase in Google search volume.
Watch: CoinGeek New York Panel, Investigating Criminal Activity on the Blockchain
New to Bitcoin? Check out CoinGeeks Bitcoin for beginners Section, the ultimate resource guide for learning more about Bitcoin – as originally envisioned by Satoshi Nakamoto – and blockchain.