Islamic Perspectives on Cryptocurrency: Halal or Haram?

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SMART WORLD - Cryptocurrency is a digital form of money that uses cryptography to secure transactions and control the creation of new units. It has gained popularity in recent years as an alternative to traditional fiat currencies, offering advantages such as decentralization, transparency, and lower transaction costs. However, cryptocurrency also poses some ethical and legal challenges, especially for Muslims who follow Shariah law and Islamic finance principles. Is cryptocurrency halal or haram according to Islam? This article will explore this question from different angles and perspectives.

Overview of Islamic Principles Relevant to Cryptocurrency

Shariah law is the divine law of Islam that governs all aspects of life for Muslims, including economic and financial matters. Islamic finance is based on the principles of Shariah law, which aim to promote justice, fairness, and social welfare. Some of the key Islamic principles relevant to cryptocurrency are:

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  • Riba: This refers to interest or usury, which is prohibited in Islam as it involves exploitation and injustice. Any transaction that involves riba is considered haram (forbidden).
  • Gharar: This refers to uncertainty or ambiguity, which is also prohibited in Islam as it involves deception and risk. Any transaction that involves gharar is considered haram.
  • Haram activities: These are activities that are forbidden in Islam, such as gambling, alcohol, pork, pornography, etc. Any transaction that involves or supports haram activities is considered haram.

Arguments for Cryptocurrency Being Halal

Some Islamic scholars argue that cryptocurrency is halal (permissible) as long as it meets certain criteria and conditions. They claim that cryptocurrency can be a valid means of exchange and store of value, similar to gold or silver, which are accepted as halal forms of money in Islam. They also claim that cryptocurrency can adhere to Islamic principles by avoiding riba, gharar, and haram activities. For example:

  • Cryptocurrency can avoid riba by not charging or paying interest on transactions or deposits.
  • Cryptocurrency can avoid gharar by ensuring transparency and reliability of transactions and platforms.
  • Cryptocurrency can avoid haram activities by not being used for illegal or immoral purposes.

Arguments for Cryptocurrency Being Haram

However, some Islamic scholars argue that cryptocurrency is haram as it violates Islamic principles in various ways. They claim that cryptocurrency is a speculative investment that involves high levels of risk and uncertainty, which are contrary to the Islamic values of moderation and prudence. They also claim that cryptocurrency is a source of instability and disruption in the financial system, which can harm the social welfare and interests of the Muslim community. For example:

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  • Cryptocurrency can involve gharar by being subject to volatility and manipulation in the market.
  • Cryptocurrency can involve riba by being used for lending or borrowing with interest or fees.
  • Cryptocurrency can involve haram activities by being used for money laundering, terrorism financing, or other criminal activities.

Analysis of Current Cryptocurrency Practices in Muslim Countries

The current situation of cryptocurrency in Muslim countries varies widely depending on the legal and regulatory frameworks adopted by each country. Some Muslim countries have banned or restricted cryptocurrency altogether, such as Algeria, Egypt, Morocco, Pakistan, Saudi Arabia, etc. And some Muslim countries have allowed or embraced cryptocurrency with some regulations and guidelines, such as Bahrain, Indonesia, Malaysia, Turkey, UAE, etc. Some Muslim countries have not issued any clear stance or policy on cryptocurrency yet, such as Iran, Iraq, Kuwait, etc.

The challenges and opportunities for the growth of cryptocurrency in Muslim countries depend on several factors, such as the level of awareness and education among the public and policymakers; the availability and accessibility of technology and infrastructure; the compatibility and compliance of cryptocurrency platforms and services with Shariah law and Islamic finance principles; the potential benefits and risks of cryptocurrency for economic development and social welfare; and the cooperation and coordination among Muslim countries and institutions on common standards and best practices.


In conclusion, the question of whether cryptocurrency is halal or haram according to Islam is not a simple one to answer. It requires a careful analysis of the nature and characteristics of cryptocurrency from different perspectives and sources of Islamic knowledge and guidance. It also requires a continuous dialogue and exploration of the implications and applications of cryptocurrency in the context of Islamic finance and ethics. Ultimately, it is up to each individual and policymaker to make informed decisions based on their own conscience and understanding of Islam.

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