Indonesia’s influential Islamic council forbids crypto usage for Muslims
Link copied to
While increasing numbers of the digitally focused world ape into various cryptocurrencies, Indonesia’s top religious body has forbidden their use for Muslims, deeming them haram under Sharia law.
First we had China FUD (fear, uncertainty and doubt). Then India FUD. Then more, and much more China FUD. Indonesia’s turn? It does have one of the world’s largest Muslim populations – about 231 million, roughly a 13 per cent global share.
News is doing the rounds about the Indonesian Ulema Council’s (MUI) decision, made today at the Ljtme Ulama Forum. And it may be contributing to an overall cool-off in the crypto sector, along with yesterday’s resurfaced fears about the widespread effect a potential Evergrande default could have on global markets.
The nation’s influential Islamic scholars’ body has forbidden crypto usage for reasons based around the uncertainty involved with “wagering and harm”, it revealed following the hearing on Thursday.
— Bloomberg Crypto (@crypto) November 11, 2021
MUI chairman Asrorun Niam Soleh said: “From the deliberations that have been determined, there are three legal dictums. Namely, the use of cryptocurrency as a legal currency is haram because it is gharar, dharar, and contrary to Law Number 7 of 2019 and BI Regulation Number 17 of 2015.”
The upshot on that, is crypto transactions are deemed by the religious body to involve high levels of speculation, risk and uncertainty.
They’re not exactly wrong on that score, but if they’d only bought $1,000 worth of Shiba Inu a year ago, they’d be billio … no, never mind, nothing.
Chairman Soleh also noted that cryptocurrencies do not align with Islam because they have “no physical form” and apparently have no real value, and “the exact amount isn’t known”.
There’s a silver lining in this, of sorts, however. Soleh did also reportedly state that a crypto could be traded as a commodity if it abides by Shariah law and demonstrates a clear benefit.
Also, the council’s decision, which essentially amounts to a “fatwa” on crypto, is apparently not actually legally binding. However, it can still be used as a means of “legislative inspiration” and influence, according to reports.