Crypto activities have been declared prohibited by religious law from Indonesia’s largest Islamic organization, Nahdlatul Ulama. A heated debate was carried out before arriving at the conclusion to declare digital currencies as “haram”. On previous occasions, the idea of a ban has not been well received by many Muslims.
The discussion of whether cryptocurrencies should be considered haram in Islam is not new, but a formal decision by a large organization such as Nahdlatul Ulama had not been taken in Indonesia until. now and are taking many by surprise since their crypto trading market was booming.
Muslim scholars have for some time considered cryptocurrencies not to represent “honest work”, having compared them to gambling and other activities considered to be against Islamic religious law.
On the other hand, some Islamic jurists have opposed this idea, believing that cryptocurrencies should be considered “”halalOr authorized.
Under Islamic law, many mediums – such as currency, grapes, etc. etc.- are “haram” or prohibited.
These views can open up a wide range of considerations to assess when examining the validity of Sharia law. Thus, a long and heated debate around the use of cryptocurrencies.
Nowadays, the digital space has become more important for currencies while cash has a narrower scope. While technological innovation has conquered many, regardless of religion, Islam considers unhealthy activities that can generate huge sums of money from interest because they see them as “unearned income”.
In addition, the meeting held by the Islamic organization considered digital currencies secured by cryptography as a medium linked to many illicit activities. The public announcement on the East Java branch Nahdlatul Ulama website reads as follows:
Participants in the Bahtsul Masail felt that although crypto is already recognized by the government as a commodity, it cannot be legalized under the [Islamic sharia].
Why Muslims might now be happy with the resolution
Indonesia has the largest population of Muslims in the world, and cryptocurrencies have become of great interest to them, especially since the pandemic.
The non-binding legal opinion comes in a separate way from the recent announcement by the Jakarta government regarding its lack of interest in following China’s measures regarding its ban on crypto transactions.
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The country’s trade minister told BeritaSaru.com in September that he would find new regulations to stay away from illegal activities, but showed no interest in banning them.
Last august Jakarta Post reported the rapid growth of the Indonesian crypto space. The Commerce Ministry said cryptocurrency investments had grown to “over 370 trillion rupees ($ 25.8 billion)” in five months. As of May, Indonesia had over 6.5 million crypto investors, leading more than 5.37 million retail investors.
Related reading | 1 in 9 Indonesians Now Have Cryptocurrency, Report
In the same report, the national director of one of Indonesia’s crypto exchanges, Luno Indonesia, was confident about the future of cryptocurrency in the country, predicting investor growth that would double or triple the number in the country. era.
This is not the first religious ban on cryptocurrencies. A similar ban occurred earlier in the year in Ingushetia, where the public had a lot to say about the reasons for the Islamic cleric’s decision.
Comments from both sides were reported in the local newspaper Ingushetia. While Deputy Mufti Chief Magomed Hashtyrov said that “Only honest work brings people together and easy virtual money puts them in conflict,” users online responded with equally strong views:
I wouldn’t say it’s exactly “easy” money. Knowledge and skills are required to use it. It seems to me that this question has not been fully studied by theologians,
Others thought these resolutions came from “a very old version of the fatwa” and some scholars are still siding with crypto users.
The effect of this fatwa issued on the Indonesian market, crypto investors and previously enthusiastic exchanges remains to be seen. They might hope that the government will bring clarity to everyone. The question arises as to whether the opposing views of academics might weigh on future discussions.