Digital assets, particularly cryptocurrencies, have surged in popularity, sparking debates about their compatibility with Sharia law. This article explores what Muslim scholars say about these assets, drawing on key fatwas, scholarly opinions, and practical insights. It delves into the debate surrounding “crypto in islam,” examining both halal and haram perspectives to help readers make informed decisions. Understanding these views is crucial for ethical participation in the crypto market.
Islamic Principles Relevant to Digital Assets
Islamic finance is guided by core principles from the Quran and Hadith, emphasizing fairness, transparency, and risk-sharing. Key concepts include the prohibition of riba (interest), gharar (excessive uncertainty), and maysir (gambling). Assets must have intrinsic value, be backed by real economic activity, and avoid speculation that resembles chance games.
Digital assets like Bitcoin and Ethereum are decentralized, blockchain-based currencies or tokens. They function as mediums of exchange, stores of value, or utilities in ecosystems. However, their volatility and lack of physical backing challenge Islamic norms. Scholars evaluate them against whether they qualify as “mal” (wealth) – something with utility and acceptability. If a digital asset promotes real utility without riba or gharar, it might be permissible; otherwise, it risks being haram.
For instance, cryptocurrencies often operate without central authorities, aligning with Islamic ideals of decentralization and transparency via blockchain. Yet, their price swings introduce gharar, making trading akin to speculation.
Diverse Opinions Among Scholars
Muslim scholars hold varied views on digital assets, reflecting the evolving nature of technology and finance. No universal consensus exists, as opinions range from outright prohibition to conditional approval. This diversity stems from differing interpretations of Sharia in modern contexts.
Some scholars classify cryptocurrencies as non-mal due to their intangible nature and volatility, arguing they lack the stability required for money in Islam. Others see them as digital commodities or assets, permissible if used for legitimate purposes. The debate intensified with Bitcoin’s rise, prompting fatwas from bodies like the Indonesian Ulema Council (MUI) and Egyptian Dar al-Iftaa.
In recent years, discussions on “crypto in islam” have gained traction on platforms like social media and academic journals, highlighting how scholars balance tradition with innovation.
Arguments For Permissibility (Halal)
Proponents argue that digital assets can comply with Sharia if they meet certain criteria. Mufti Faraz Adam, a Sharia advisor, views many cryptocurrencies as providing utility within their networks, such as access to services or ownership rights, qualifying them as mal. He applies the principle of al-Urf al-Khass (customary practice in specific groups), allowing their use as mediums of exchange.
Ziyaad Mahomed, Shariah Committee Chairman at HSBC Amanah Malaysia, supports this, noting that cryptocurrencies tick boxes for transparency and traceability – hallmarks of Islamic finance. Blockchain’s immutable ledger ensures all transactions are disclosed, aligning with the emphasis on honesty.
A groundbreaking development came in 2025 when a 90-year-old Saudi Salafi cleric issued a fatwa declaring Bitcoin halal, viewing it as an acceptable currency subject to zakat like traditional assets. This could boost adoption in Muslim-majority countries, where Islamic finance dominates. Scholars like Mufti Muhammad Abu-Bakar have long argued that speculation in all currencies exists, not disqualifying crypto outright.
From a trader’s perspective, halal crypto involves spot trading without leverage, avoiding riba from borrowing. Assets backed by real-world utilities, like those in decentralized finance (DeFi) protocols promoting risk-sharing (mudarabah or musharakah), are more likely halal.
Arguments Against Permissibility (Haram)
Critics, including Sheikh Shawki Allam, Egypt’s Grand Mufti, deem cryptocurrencies haram due to their speculative nature and potential for illicit activities. He argues they resemble gambling, with prices driven by hype rather than intrinsic value, introducing excessive gharar.
Shaykh Haitham al-Haddad echoes this, warning of anonymity enabling money laundering. The MUI in Indonesia ruled Bitcoin haram in 2021, citing its lack of underlying assets and volatility. Scholars like Monzer Kahf initially saw potential but later highlighted manipulation risks.
Research in journals notes that cryptocurrencies fail as stable money, as Islam requires currencies to be asset-backed and non-volatile. Futures trading in crypto is widely haram, resembling maysir due to leveraged bets on price movements.
As a trader, I’ve seen how hype cycles lead to losses, reinforcing the haram view. Muslims should avoid day trading crypto if it borders on gambling.
Key Fatwas and Scholarly Views
Several fatwas shape the discourse. The Saudi cleric’s 2025 fatwa marks a shift, potentially influencing Gulf states. Earlier, Egypt’s Dar al-Iftaa declared Bitcoin haram in 2018, citing speculation.
In academia, a 2020 study in Heliyon evaluated crypto against Islamic money requirements, concluding reluctance among Muslims due to volatility. A 2023 Cointelegraph analysis suggests compliance if assets have utility and avoid harm.
Bodies like Amanie Advisors certify projects like HelloGold, a gold-backed crypto, as halal by limiting volatility. These views evolve; recent papers from 2024-2025 recognize digital assets as mal if backed by real utility.
Sharia-Compliant Alternatives
For Muslims interested in digital assets, Sharia-compliant options exist. Gold-backed tokens like OneGram reduce speculation by tying value to physical gold. Platforms like GreenX offer ESG-focused, halal crypto trading.
Islamic DeFi projects use smart contracts for mudarabah (profit-sharing) without interest. NFTs representing real assets, like property or art, could be halal if non-speculative. Traders should consult certified Sharia boards and focus on long-term holding over short-term flips.
Emerging trends include sukuk (Islamic bonds) on blockchain, blending tradition with tech for compliant investments.
Conclusion
The discourse on modern digital assets in Islam reveals a spectrum of scholarly opinions, from halal endorsements for utility-driven cryptos to haram rulings on speculative ones. As “crypto in islam” continues to evolve, Muslims must seek knowledge, consulting reliable scholars and avoiding excess risk. From my experience as a trader, the key is intentionality: use digital assets for real economic value, not gambling. With fatwas like the recent Saudi one, adoption may grow, but always prioritize Sharia compliance for barakah (blessings) in wealth.
This balanced approach ensures faith and finance align in our digital age.